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HMRC internal manual

Admin Law Manual

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HM Revenue & Customs
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Extra-statutory concessions: Deciding whether an extra-statutory concession can be made

Interpreting the legislation

If the legislation in question is unequivocal then there is no scope for any alternative interpretation. Applying an alternative interpretation would be unlawful.

If the legislation in question is ambiguous and/or is silent on minor aspects, then it is legitimate:

  • to make a purposive interpretation of the legislation which puts a construction on any ambiguities that is consistent with Parliament’s intention; and
  • to formulate policy to deal with minor legislative gaps/silences in a way that is consistent with Parliament’s intention and which will avoid anomalies and cases of hardship.
  • Such interpretations will be lawful provided they are reasonable, fair and proportionate and, where relevant, do not create distortions of competition or amount to State Aid. These interpretations are generally not strictly concessions and might best be published as Statements of Practice.
  • Matters of statutory construction require the advice of HMRC’s Solicitors Office.
  • Similarly, where legislation is or appears to be silent, the question of whether the apparent gap can be filled as a matter of statutory interpretation is complex and legal advice must be sought.
  • Policy owners contemplating a purposive interpretation on the ground that the legislation is ambiguous or has minor gaps should also seek Solicitors’ advice. Subject to that advice, policy owners may then legitimately make a purposive interpretation of the legislation or formulate policy to deal with minor legislative gaps or silences.

You should also consult Tax Admin Policy for any questions arising from this section.

Concessions from the strict letter of the law

The circumstances in which policy owners will consider making ESCs will vary widely. All proposed concessions must comply with the following requirements.

  • The concession must not amount to the Commissioners refraining from collecting taxes and duties that Parliament has decreed shall be paid merely because it might seem unfair or objectionable to collect the tax.
  • The concession can only provide for policy issues in the interstices of tax legislation, dealing pragmatically with minor or transitory anomalies, cases of hardship at the margins, or cases where a statutory rule is difficult to formulate or its enactment would take up a disproportionate amount of Parliamentary time.
  • The Commissioners managerial discretion extends to cover a concession which will deliver the best means of obtaining the highest net return to the Exchequer that is practicable, having regard to the staff available to them and the cost of collection
  • The concession does not in any way purport to allow the Commissioners to act in any way contrary to the intention of Parliament.