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HMRC internal manual

International Manual

Arbitrage: legislation and principles: procedures: Notices directing that the legislation will apply

In order to ensure consistent application of the legislation, HM Revenue and Customs Commissioners’ intention is to retain responsibility for the issue of notices within CSTD Business, Assets & International.

Notices may be issued before or after a return is made and exceptionally may be made on a discovery basis after the return enquiry window has closed (see INTM596530). Notices are issued by the Commissioners of HM Revenue and Customs. After a return has been made, a notice may be issued only after an enquiry has been opened (in practice, the opening of the enquiry and the issue of the notice may be simultaneous).

The notice will include the following details:

  • the company to whom it is issued;
  • the period to which it relates;
  • the transactions to which the notice applies;
  • the HMRC view of the implications of the notice for the taxpayer’s liability to tax.

A notice applies in respect of specified transactions in a specified period. It is immaterial whether or not the scheme or the effect of the transactions remains at the time that the notice is issued.

Once a notice has been issued, the company must consider what effect the legislation has on their tax liability in the same way as they consider any other relevant tax legislation. Although HM Revenue and Customs will set out its view of the effect of the legislation in the notice, the company should base their self assessment on their own view of their tax liabilities as calculated taking the legislation into account in respect of the specified transactions.