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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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How to do a compliance check: starting a compliance check: agreements concerning the taxation of individuals or companies for future periods

If you come across any agreement concerning the taxation of individuals or companies for future periods you must contact COPGU for advice before proceeding with your compliance check.

In the past HMRC (or a predecessor department) entered into what were known as Forward Tax Agreements with the taxpayer. The purpose of a Forward Tax Agreement (FTA) was to agree a practical basis for taxing future income or gains where there would otherwise be difficulties in establishing exact figures.  Whilst these were made in good faith they are likely to be unlawful.

Typically, the agreements have 3 key features:

  • They are with individuals who are non-domiciled in the UK
  • They  concern the taxation of overseas income or gains
  • They cover future periods

It is possible that a FTA may have been made in other circumstances and may relate to other taxes and duties. If you identify any agreements concerning the taxation of individuals or companies for future periods you must contact COPGU for advice before proceeding further.

The examples below each have a forward element but don’t amount to an FTA. None of these would need to be reported:

  • contract settlements agreeing instalment arrangements EM6251
  • collection and recovery ‘time to pay’ agreements DMBM803510
  • ‘transfer pricing’ agreements INTM412010
  • ‘treaty rate’ agreements (form 4450-type cases) EM0722
  • PAYE Settlement Agreements PSA1010
  • PAYE Dispensations EIM30051
  • ‘private use’ agreements, (for example, that the non-business element of motoring costs is, say, 30% of total motoring costs) EM2022
  • expenses agreements, (for example, a fixed annual deduction for expenses for a particular category of employee) EIM32712