As part of the Government's 'Protocol on unscheduled announcements of changes in tax law', a change in HMRC's interpretation of the law will not be regarded as legally significant unless prompted by a Court ruling.
The document declares that the Government's aim is to “strike the right balance between restoring the UK tax system's reputation for predictability, stability and simplicity and preserving its ability to protect the Exchequer by making changes where necessary. In particular, changes to tax legislation where the change takes effect from a date earlier than the date of announcement will be wholly exceptional.”
Ministers will be required to observe the following criteria when considering legislative tax changes which will:
- be announced other than at the Budget; and
- take effect before the legislation implementing the change is enacted.
Such changes to tax law will normally only be announced other than at Budget where:
- there would otherwise be a significant risk to the Exchequer;
- significant new information has emerged to identify the risk or indicate its scale; and
- changing the law immediately is expected to prevent significant losses to the Exchequer.
Although the Government will not invite comment on the intention to legislate, the nature of the change or the timing, it will consult after any announcement to establish whether their proposed legislation has the desired effect.
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