The uncertain tax treatment (UTT) regime was introduced in 2022 with the intention of reducing the portion of the tax gap caused by differences in legal interpretation. This is where the taxpayer takes a different view from HMRC on how the law should be interpreted or applied. The UTT regime seeks to address this by requiring large businesses to notify HMRC of differences in interpretation.

On 12 March 2026, the government published a consultation setting out changes to the regime. The government says that the changes are necessary in order “to require more legal interpretation uncertainties to be notified to HMRC, thereby improving transparency and ensuring consistent and fair treatment to other taxpayers and taxes”. The consultation will close on 4 June 2026. 

The current regime

Under the UTT regime, notification is currently required where all of the following conditions are met.

• The taxpayer is a company or a partnership.
• The taxpayer meets both of the following financial limits (for a company, on its own or as part of a group):
  • turnover of more than £200m; and 
  • a UK balance sheet total of more than £2bn.
• A return submitted to HMRC includes an “uncertain amount” of corporation tax, income tax or VAT. An amount is uncertain where at least one of the following triggers is satisfied:
• the taxpayer has made a provision in its accounts to reflect that its interpretation may not be successful if challenged; and/or
• the taxpayer is taking a position that is contrary to HMRC’s known position, as published in guidance or in direct dealings with HMRC.
• The tax advantage from the uncertain amount (or the total of those advantages where there is more than one uncertain amount in the period) exceeds the threshold of £5m.  
• An exemption does not apply. A general exemption applies where it is reasonable for the taxpayer to believe that HMRC is already aware of the uncertainty.

Proposed changes

The government intends to:

• bring individuals and trusts within the scope of the regime. The turnover and balance sheet limits that apply to determine if a business is within the regime will not apply to individuals and trusts;
• extend the regime to include stamp duty land tax, national insurance contributions, the construction industry scheme, capital gains tax and inheritance tax. To reduce the administrative burden for taxpayers of having to submit separate notifications at different times, the government proposes to introduce a new single annual date by which all UTT notifications must be submitted; 
• introduce an additional trigger to require disclosure where HMRC’s position is not known and there is more than one credible interpretation; and
• tighten the general exemption by requiring the taxpayer to have confirmation from HMRC that HMRC is aware of the uncertainty.

No changes are proposed to other aspects of the regime. For example, the threshold will remain at £5m. 

The government intends to publish its response to the consultation in the summer and include any legislation in the next available Finance Bill, with the changes applying to returns filed after 1 April the following year.