Make the most of HMRC’s Guidelines for Compliance

Susan Cattell explains why it is worth using a guidance product that gives HMRC’s views on complex, widely misunderstood or novel risks across tax regimes.

The first of HMRC’s Guidelines for Compliance (GfC) appeared in 2022. It is important to realise that they can be useful to businesses of all sizes and to agents, even though they were announced in 2021 as part of the review of tax administration for large businesses.

There are now 12 GfC (with more in development), covering a range of different taxes. It is worthwhile familiarising yourself with the topics they cover and keeping up to date as new ones are published.

How can GfC help agents and businesses?

HMRC decided to issue GfC in response to requests from businesses for more transparency and clarity to help them manage their tax risk. The intention is to share HMRC’s view of risks, highlighting approaches that may lead to errors and HMRC interventions. GfC will also suggest practical approaches to lower the risk of non-compliance.

HMRC makes clear that the guidance in its technical manuals and other publications remains its view of the law. The GfC will provide additional insight and detail to help businesses get their tax right, for example, by highlighting common problems to avoid or setting out HMRC’s preferred approach to some transactions. It isn’t mandatory to follow GfC, but doing so could help businesses avoid unnecessary HMRC contact and adopt a lower risk tax strategy, reducing the risk of paying additional tax, interest, and penalties.

What do GfC cover?

They may cover any tax or duty that businesses account for or pay. They may cover subjects relevant to businesses of all sizes, including complex tax issues faced by multinational groups. For large businesses within the scope of the Uncertain Tax Treatment (UTT) regime they will be relevant in considering HMRC’s ‘known position’.

The 12 GfC currently available are:

Corporation Tax

GfC 3: Help to see if your work qualifies as Research and Development for tax purposes 

GfC 9: Help with Patent Box computations

Capital Allowances

GfC 5: Help to avoid errors in claims for plant and machinery allowances 

Transfer pricing

GfC 7: Help with common risks in transfer pricing approaches 

VAT

GfC 2: Help with VAT apportionment of consideration 

GfC 8: Help with VAT compliance controls 

GfC 11: Help with VAT treatment of remedial works 

Employer duties

GfC 1: Help with PAYE Settlement Agreement calculations 

GfC4: Help to comply with the reformed off-payroll working rules (IR35) 

GfC 10: Help with the Apprenticeship Levy and Employment Allowance — connected entities 

Cross tax

GfC 6: Help with football agents' fees and dual representation contracts

GfC 12: Help with labour supply chain assurance 

Let us know what you think of GfC

If you use any of the GfC, we would like to know what you think of them: email the tax team with your input. We also welcome feedback from members on other HMRC guidance, tax consultations and on HMRC service levels. We regularly attend meetings with HMRC, where issues you raise with us are discussed.