Sanctions for persistently uncooperative large businesses

Produced by Tolley
Sanctions for persistently uncooperative large businesses

The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Sanctions for persistently uncooperative large businesses
  • Introduction
  • Large business notification of uncertain tax treatment
  • Definitions
  • Notices
  • Warning notice
  • Special measures notice
  • Other situations in which a special measures notice may be issued
  • Confirmation notice
  • Increased penalties for errors
  • More...


Following a period of consultation on ‘Improving Large Business Tax Compliance’ during 2015, Finance Act 2016, s 161 and Sch 19, Part 3 introduce a regime to counter persistently uncooperative behaviour from large businesses.

The rules apply to large UK groups but are also extended to include large UK sub-groups, large companies and large partnerships by FA 2016, Sch 19, paras 50–52. For the sake of brevity, this guidance note mainly refers to the rules in the context of large UK groups.

The Government hopes that a targeted ‘special measures’ regime will tackle those large businesses who persistently pursue aggressive tax planning or refuse to engage in an open and collaborative way with HMRC. In parallel, there is now a legislative requirement for large businesses to publish their tax strategy, see the Publication of tax strategies by large businesses guidance note for the detailed provisions enacted in this area.

A UK group falls within the new rules if it has persistently engaged in uncooperative behaviour which has contributed to or caused two or more unresolved and significant tax issues, and there is a reasonable likelihood of further instances of such behaviour by the group or its members. Definitions of these terms and the sanctions available to HMRC where these attributes are present, are set out below.

Large business notification of uncertain tax treatment

As announced at Spring Budget 2020 (see para 2.260), a consultation process is underway regarding the requirement for large businesses to notify HMRC when they take a tax position that HMRC is likely to challenge. Examples of uncertain tax treatment include treatment that is currently under dispute in the courts, or contrary to HMRC’s stated view. This notification process is part of a package measures aimed at improving the transparency of the approach large businesses take towards taxation, such as the sanctions for uncooperative behaviours outlined in this guidance note and the requirement to publish tax strategies.

A business, which includes a partnership, an LLP or

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