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HMRC internal manual

Admin Law Manual

Incorrect Advice to Customers: Advice overtaken by a change in the law

Sometimes we give advice which is correct at the time it was given, but is later rendered incorrect by new legislation, or by a change in the prevailing understanding of the law following a court or tribunal judgement.

In the case of the former, if the legislation is retrospective we will not be bound by any advice we have previously given covering the period of retrospection. This situation very rarely occurs.

If the new statute comes into force before the transaction in question, any advice given prior to the new legislation will not be considered to be binding. HMRC has a duty to collect the correct amount of tax as required by statute at the time the transaction takes place. It remains the customer’s responsibility to take account of changes in the law.

When a court judgment changes the prevailing interpretation of the law on which the advice was based, you should refer to guidance or the relevant technical adviser before taking any action or entering into discussions with the customer.