HMRC are introducing a replacement for Code of Practice 10 (Information and Advice) on 30 September. It will be called CAP1 and will be their practice note on dealing with non business queries about the interpretation of recent legislation. They do not explain the distinction between a business taxpayer and a non business taxpayer or what is a business activity, but I doubt whether that will cause any real difficulty. A helpful checklist is provided which must be completed in all cases. Enquiries about matters relating to business activities are dealt with by a separate practice.

HMRC will not give any planning advice under this practice or give any kind of approval to proposed arrangements – and they will obviously not respond to enquiries about tax schemes.

HMRC do envisage that people might contact them for clarification about a proposed transaction and confirm that they will respond – providing they are satisfied that the transaction will take place as described. There is obviously a fine line here between seeking such clarification and HMRC approving the proposals in some way.

If having sought advice from HMRC and received their view, you do not have to agree with it (or follow it) but if you adopt a different interpretation, this would need to be disclosed in your tax return.