International Tax Review: Why did HMRC update its SAO guidance earlier this year?
HMRC: It was updated for two reasons. Firstly, the original guidance did not accord with the standard style and format of HMRC guidance. This was because the legislation was introduced quite quickly and as such, the attendant guidance also needed to be prepared in the same time scale to support it. This made it difficult to recognise all issues that may arise. Secondly, the legislation has been in operation for some time, during which a few issues have arisen that were not envisaged at the time of writing the original guidance. The updated guidance has therefore been able to address these. Indeed, if new issues arise in the future the new guidance will be amended as necessary.
ITR: Have there been any unforeseen problems that have come up relating to how the guidance operates?
HMRC: No, there haven’t been any problems relating to how the guidance operates. Indeed, positive feedback has been received from a number of external sources.
ITR: How is HMRC helping taxpayers to comply?
HMRC: The taxpayers to whom the SAO legislation applies will be the very largest UK companies and groups of companies. They have allocated to them a designated HMRC caseworker, often known as a Customer Relationship Manager (CRM). The implementation and requirements of the legislation will be a regular topic of conversation during meetings between the designated caseworker and the company or group.
ITR: Are there any tweaks to the guidance planned for the near future?
HMRC: Yes, there are a few, with the main one addressing the calculation of turnover for insurance companies. (The amount of turnover is one of the alternative tests to see whether a company comes within the SAO legislation. The other is a balance sheet asset test.) As above, HMRC guidance is constantly updated to reflect new issues and revised thinking.
ITR: What is the likelihood that there will be a time when SAO rules won’t be required?
HMRC: Nothing can be ruled in and nothing can be ruled out, but there is no thought at present that the SAO legislation would be repealed.
