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This Practice Note outlines the law concerning criminal recklessness. The subjective test for recklessness Certain statutory and common law offences allow the prosecution to prove mens rea through ‘recklessness’. Put simply, recklessness is where the accused takes an unjustified risk that results in unlawful harm or damage. The House of Lords in R v G reaffirmed the subjective approach to recklessness. Before R v G, two distinct tests were used, depending on the offence charged: Subjective recklessness from R v Cunningham: the prosecution had to establish that the accused personally foresaw the risk. Objective recklessness from R v Caldwell: the prosecution only needed to show that the risk would have been obvious to a reasonable person, without proving the accused themselves foresaw it. In R v G, the House of Lords concluded that the objective test could operate unfairly where a defendant did not foresee the
This Practice Note examines the remedy of rescission, explaining when and in what manner a contract can be unwound (at common law, in equity and under statute) and thereby terminated and brought to an end. It covers the consequences and effects of rescission, the principal grounds for setting aside an agreement (misrepresentation, mistake, undue influence, duress, non‑disclosure, fiduciary misdealing and bribery) and the main obstacles to claiming rescission—affirmation, the intervention of third‑party rights and the impossibility of restitution. For further guidance on rescission in the context of misrepresentation, see Practice Note: Misrepresentation—rescission as a remedy. There are many ways in which a contract may reach its end; see: Terminating contracts—how and when a contract ends—overview for a brief and accessible summary, with links to the related further practical guidance, including Practice Note: Termination and expiry of contracts. For a table
What is a res judicata? A res judicata is a determination by a court or tribunal with jurisdiction over the cause of action and the parties, which finally disposes of the issues decided so they cannot be litigated again by those bound, save on appeal. Final judgments entered by default or by consent fall within this concept, whereas rulings on purely procedural points and any decision lacking finality do not. The doctrine’s aim is to bring litigation to an end and shield parties from being harassed by the same dispute twice. in personam—binds the parties and their privies in rem—binds all persons, privy or otherwise (ie a judgment binding the whole world) A party may rely on res judicata: as an estoppel to defeat an opponent’s claim or defence; and/or as the basis of their own claim or
The offence of causing grievous bodily harm with intent Wounding or causing grievous bodily harm (GBH) with intent can be tried solely in the Crown Court on indictment. Elements of the offence Under the Offences against the Person Act 1861 (OATPA 1861), the prosecution must establish that the defendant unlawfully and maliciously: wounded with the intention of causing GBH, or caused GBH with that intention, or wounded intending to resist or prevent the lawful arrest or detention of any person, or caused GBH intending to resist or prevent the lawful arrest or detention of any person ‘Unlawfully’ and ‘maliciously’ Unlawfully The wounding or causing of GBH must be unlawful. Such conduct may be lawful if used: in self-defence in defence of another in defence of property for the prevention of crime where the victim gave express or implied consent For further information on these defences, see below:
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The Enterprise Investment Scheme ( EIS) The Enterprise Investment Scheme ( EIS) aims to stimulate investment in smaller, higher-risk trading businesses by providing a suite of tax reliefs to individuals acquiring newly issued shares in such companies. The EIS framework is prescriptive and stipulates a range of conditions that must be satisfied, covering: the individual investors (see Practice Note: EIS—conditions for relief: individual investor conditions) the issued shares (see Practice Note: EIS—conditions for relief: issued shares, the funds raised and the arrangements in general) the issuing company (see Practice Notes: EIS—conditions for relief: issuing company and EIS—conditions for relief: qualifying trades) Although the remaining Practice Notes in this subtopic proceed on the basis that an individual subscribes directly for shares in an EIS-qualifying company, investors can also secure EIS relief by subscribing through an EIS fund, so long as all other EIS...
FORTHCOMING CHANGE relating to new advance clearance processes: After first being trailed in the Autumn Budget 2024 within the government’s Corporate Tax Roadmap, and then consulted on at the Spring Statement 2025, the Budget 2025 set out the consultation conclusions and confirmed HMRC will roll out a new advance tax certainty service in July 2026. This service is intended for eligible parties investing in ‘major projects’ with at least £1bn of in-scope UK spend, aimed at qualifying persons. The Budget 2025 announcements indicated that the service will cover a specified range of taxes, including corporation tax, VAT and stamp taxes, but will exclude transfer pricing, valuation, purpose-based tests and hypothetical cases. Clearances will bind HMRC (but not the taxpayer) from revising its interpretation of the law, applied to fully disclosed facts, for up to five years, provided facts and law are...
What is a dividend reinvestment plan and why do companies offer them? A dividend reinvestment plan ( DRIP) is an arrangement through which a company—almost always a listed one—provides a service letting shareholders direct their dividends towards purchasing more of its shares. This service is usually operated by an independent administrator. DRIPs are often mentioned alongside scrip dividends (covered in depth in: Tax issues on a scrip or stock dividend) because the end result is very similar: the investor ends up with additional shares rather than a cash payout. Legally, however, they are distinct. Under a DRIP, the shareholder first receives the dividend and elects to deploy the cash to acquire extra shares. Of course, investors could choose to do this themselves without any company-run service. A DRIP merely simplifies the mechanics by ensuring the dividend proceeds flow straight to the...
FORTHCOMING CHANGE relating to new advance clearance processes: After an initial unveiling at Autumn Budget 2024 under the government’s Corporate Tax Roadmap, and a consultation issued at Spring Statement 2025, Budget 2025 set out the consultation conclusions and confirmed HMRC will introduce a new advance tax certainty service in July 2026. That announcement also confirmed a July 2026 start date for the service. The regime is expected to be available to qualifying parties backing ‘major projects’ with at least £1bn of in-scope UK spend. According to the Budget 2025 updates, the service will address a defined suite of taxes — corporation tax, VAT and stamp taxes — while excluding transfer pricing, valuation, purpose-based tests and hypothetical cases. Clearances will commit HMRC (but not the taxpayer) not to alter its view of the law, where all facts are fully disclosed, for up to five years,...
Article 10 of the Organisation for Economic Co- Operation and Development ( OECD)’s model tax convention ( MTC) is concerned with the taxation of dividends paid cross border. Article 10 of the Organisation for Economic Co- Operation and Development ( OECD)’s Model Tax Convention ( MTC) addresses rules on how dividends distributed across borders are taxed......
Discovery assessments A discovery assessment is an HMRC assessment to charge tax (or additional tax) where it identifies that too little tax was assessed for an earlier tax year or accounting period. HMRC will typically issue a discovery assessment when it is out of time to open an enquiry into the relevant tax return. This Practice Note concentrates on one specific element of the discovery rules: in some circumstances, HMRC can only make a discovery assessment if, at a given point in time, it did not have sufficient information to be aware of a potential loss of tax. For an explanation of the following: HMRC’s power to open an enquiry, and the relevant time limits within which it may do so the meaning of HMRC making a ‘discovery’ (of a potential loss of tax) the taxpayer’s ability to avoid a discovery assessment where the return was prepared in line with...
HMRC may probe suspected tax-related criminal offences in England and Wales by exercising the powers, and observing the safeguards, set out in the Police and Criminal Evidence Act 1984 ( PACE 1984). Equivalent legislation exists for Northern Ireland. PACE does not extend to Scotland, but there is legislation providing powers and protections that replicate the PACE measures, tailored to the Scottish legal system. The balance of this Practice Note addresses the legislation in England and Wales. Alongside HMRC’s powers to examine tax-related criminal offences in Wales, the Welsh Revenue Authority holds powers to investigate offences linked to Welsh devolved taxes. Tax enquiries can also be undertaken by the National Crime Agency ( NCA). The NCA operates independently of HMRC, though HMRC may supply information to it for the purposes of its functions. One of the NCA's functions is the recovery of money and assets...
FORTHCOMING CHANGE relating to a consultation and draft legislation on better use of new and improved third-party data : Following a Spring Statement 2025 consultation, which closed on 21 May 2025, draft provisions were issued on 21 July 2025 for inclusion in Finance Bill 2026 ( FB 2026). These would confer regulation-making powers to enhance the quality and timeliness of third-party data obtained by HMRC under its bulk data-gathering powers, with a particular focus on financial account information and card sales data. The reform aims to modernise HMRC’s approach by shifting from notice-based requests to a standing reporting obligation and by rolling out standardised schemas for submissions. It also mandates collection of tax identifiers, such as National Insurance numbers, to improve data matching, together with a range of penalties for non-compliance. At Budget 2025, the government confirmed it would proceed, after which...
FORTHCOMING CHANGE: On Tax Administration and Maintenance Day, 27 April 2023, the former Conservative administration issued a call for evidence on refreshing HMRC’s information and data-gathering powers to support the digital overhaul of taxpayer services, strengthen HMRC’s compliance functions, and cut administrative burdens. With a deadline of 20 July 2023, the exercise asked for views on, among other areas: ways to reform and enhance the collection of information and data from third parties, informed by international best practice; scope to modernise HMRC’s third-party information and data-gathering powers and the accompanying safeguards; how to streamline the process by which HMRC issues information notices obliging a taxpayer or third party to supply information, data or documents. At Spring Statement 2025, the government released a summary of responses to that call for evidence as Annex C to the consultation titled ‘ Better use of new and...
FORTHCOMING CHANGE: On 15 February 2024, the government issued a call for evidence titled ' The Tax Administration Framework Review: enquiry and assessment powers, penalties, safeguards', seeking input and views on how HMRC’s enquiry and assessment powers, penalties and safeguards might be overhauled. It considered a broad set of reform avenues, carefully weighing opportunities and risks around a more consolidated suite of powers, assessing whether parts of the tax system could benefit from HMRC taking a different approach, and updating how HMRC delivers statutory notices to taxpayers and agents alike. The call for evidence closed on 9 May 2024. On 30 October 2024, HMRC released the outcome of the exercise, summarising responses and setting out the government’s next steps and intentions. Among these next steps is a commitment to build on the call for evidence by consulting on options for new...
ARCHIVED : This Practice Note has been archived and is not maintained. HMRC may levy a penalty when tax returns contain inaccuracies or omit required information. The regime that applied before 1 April 2009 (the ‘old penalties’) differs from the current arrangements (the ‘new penalties’). Both systems operate in parallel and will continue to do so for a number of years, as the applicable regime is determined by the original filing date and the relevant return period. For more on the new penalties in Schedule 24 to the Finance Act 2007, see: Penalties for inaccuracies in returns—introduction to the regime. What periods are covered by the old regime? The old penalties apply to tax returns with a filing date up to and including 31 March 2009. For income tax, capital gains tax and Class 4 national insurance contributions, they apply to returns up to and...
EU legal principles For EU Member States, Council Directive 2006/112/ EC (the VAT Directive) establishes the framework for a common VAT regime, which every Member State must transpose into its own legal order through domestic legislation. That national legislation must not only give proper effect to the VAT Directive, but be enacted and applied in a way that accords with a series of EU legal principles (the EU general principles). This was undoubtedly so in the UK while it remained an EU Member State. What has followed since the UK’s exit from the EU is covered in Practice Notes: Retained EU law and tax, Assimilated law and Assimilated law and tax. A summary of the key points appears at the end of this Practice Note; suffice it to say for now that EU general principles have not—contrary to some...
Practice Note This Practice Note has been prepared by Anne Redston, Barrister, and reflects her own perspective; she is not authorised to speak for the Tribunals Service or the judiciary in any capacity. The Note explains what to do once a taxpayer chooses to appeal an HMRC decision to the First-tier Tax Tribunal ( FTT). It spans the period from the outset of the appeal process through to the hearing date, and carefully considers, among other relevant procedural matters: the appeal form—where to find it and practical guidance on completing it correctly the FTT’s allocation of the case to a category and the effects and implications of that allocation pre-hearing directions issued by the FTT handling evidence expected to be given by video or telephone from a location outside the UK, and matters relating to...
Practice Note This Practice Note is authored by Anne Redston, Barrister. It reflects her personal perspective; she is not authorised to speak for the Tribunals Service or the judiciary. It explains what to expect at an appeal hearing before the First-tier Tax Tribunal ( FTT) and addresses practicalities, including: who will attend (including witnesses) and where each person will sit how to address the FTT and HMRC the sequence of events during the hearing the distinction between law, evidence and argument the three categories of decision notice You should also consider the position on costs. Further detail is provided in Practice Note: Costs in the First-tier Tax Tribunal ( FTT). The FTT offers additional guidance on hearing procedures in its leaflet, ' At your hearing'. Before you read this Practice Note, you should consult Practice Note: Appealing an HMRC...
Civil investigation of tax fraud HMRC’s stated approach to tax fraud is to favour civil procedures rather than criminal ones wherever appropriate, and where a civil route is suitable it will be pursued. Pursuing criminal enquiries and prosecutions is costly and, as a result, runs counter to HMRC’s revenue‑raising function. Accordingly, criminal action is reserved for instances where it will operate as an effective deterrent or where there are aggravating features, such as involvement in an organised plan. As an alternative to a criminal investigation, where deliberate behaviour has brought about a loss of tax, HMRC may employ its civil investigation of fraud process as set out within Code of Practice 9 ( COP9). COP9 operates through the Contractual Disclosure Facility ( CDF), which gives the recipient the opportunity to make a full disclosure of their conduct, with HMRC agreeing not to commence a...
This Practice Note describes: This Practice Note explains how trading losses arise and are applied for general partnerships, limited partnerships and limited liability partnerships ( LLPs). For a general guide to capital losses, see Practice Note: Capital losses for businesses. Where a partner is allocated a share of a partnership trading loss, relief follows the income tax rules for individuals or the corporation tax rules for corporate partners. the computation of partnership losses and how losses are apportioned between partners special allocation rules where some partners have profits and others losses and/or in mixed membership partnerships income tax loss relief available to individual partners corporation tax loss relief available to corporate partners restrictions on income tax relief for individual partners restrictions on corporation tax relief for corporate partners limits on relief for limited partners, LLP members and...
STOP PRESS: Abolition of non-dom regime and remittance basis of taxation from 2025–26 : Finance Act 2025 abolished the remittance basis of taxation and replaced it with a residence-based regime from 6 April 2025 The reforms bring in a new Foreign Income and Gains ( FIG) regime and revise the rules governing overseas workday relief. For further detail on these measures, refer to Practice Note: The abolition of the remittance basis of taxation from 2025–26. The foreign service exemption is, in essence, an income tax relief for termination payments where both of the following are met: the employee performed all or part of their employment overseas (described in the legislation as ‘foreign service’), and the employee is not UK resident in the tax year in which their employment ends This second condition applies to terminations taking place on or after 6 April 2018. Before that date, the...
This Practice Note Authored by Anne Redston, Barrister. It reflects her personal opinion; she is not authorised to speak for the Tribunals Service or the judiciary. It sets out how to assess whether an individual is employed or self-employed, considering: National Insurance contributions ( NICs) deeming provisions The parties’ contractual relationship HMRC status determinations and avenues for challenge HMRC’s Check Employment Status for Tax ( CEST) tool Read alongside Practice Note: Employment status tests—from a tax and NICs perspective. The reasons status matters are outlined in Practice Note: Employment status—why it matters. Note that this and other employment status Practice Notes summarise the law and do not address every scenario. HMRC may apply a different approach to workers in the entertainment sector—film, theatre, TV and radio, and musicians—which is outside the scope of this Note. Further changes are expected as the...
The tax regime applicable to property authorised investment funds ( PAIFs) applies to UK open-ended investment companies ( OEICs) which: meet a number of prescribed conditions, and have notified HMRC in advance that they wish the PAIF regime to apply to them This Practice Note concentrates on the criteria that must be satisfied for the PAIF rules to apply to an OEIC in practice. As a starting point, for a top-level overview of the PAIF tax regime in its entirety, see Practice Note: Taxation of property funds—overview. Further important elements of the framework are considered in the Practice Notes: PAIFs—tax treatment of the fund and its investors and PAIFs—breaches and exit. There is significant overlap between the PAIF tax rules and the UK tax regime for real estate investment trusts ( REITs) in many areas. This reflects their...
UK income tax is charged on the profits of a property business, whether carried on in the UK or abroad. A property business covers activities that derive income from land and encompasses all dealings undertaken with that objective. Income taxpayers include both: UK resident persons (ie individuals or trustees)—liable to income tax on the profits of their UK and overseas property businesses; and non- UK resident persons (ie non- UK resident individuals or trustees or, prior to 6 April 2020, companies investing in property)—liable to income tax on the profits of their UK property businesses but not their overseas property businesses For an explanation of how profits and losses of a UK or overseas property business are calculated, see Practice Note: Property income—the income tax charge. Broadly, a property business loss may arise where interest and other property letting costs exceed rental...
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When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...
This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...
Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...
I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...
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