On 9 September 2026, the Chartered Institute of Taxation (CIOT) responded to the government’s draft legislation on tax error correction, warning that the proposed rules could inadvertently increase uncertainty for taxpayers and advisers. The draft aims to strengthen the framework for correcting errors in tax returns and assessments, but CIOT argues that without clearer safeguards—such as a statutory definition of “error” and robust appeal rights—the regime may lead to inconsistent application by HMRC and protracted disputes. The Institute calls for amendments to ensure fairness and predictability before the legislation is finalized.
Key Takeaways
- Need for Clear Definitions: CIOT stresses that the legislation must define “tax error” precisely to avoid divergent interpretations by HMRC officers, which could result in arbitrary corrections and penalties.
- Safeguards for Taxpayers: The Institute recommends embedding statutory time limits for corrections, a right to independent review, and protection against retrospective application to past periods where taxpayers acted in good faith.
- Impact on Compliance Costs: Uncertainty in the correction regime may increase compliance costs for businesses and advisers, who must navigate ambiguous rules when amending returns or responding to HMRC inquiries.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement