Chapter 1: The UK Tax System - Sources of LAW Flashcards
Statute Law (Tax legislation)
Description and notes
Adherence is mandatory
Tax legislation is normally updated annually in the Finance Act.
Statutory Instruments
Description and notes
Detailed notes on an area of tax legislation
Case Law
Description and notes
Case law refers to the decisions made in tax cases brought before the courts.
Cases may challenge tax legislation or argue a certain interpretation of the tax law should be applied. Rulings are binding and therefore provide guidance on the interpretation of tax legislation.
HMRC Guidance: Statement of practice (SOP)
Description and notes
HMRC’s interpretation of tax law and clarification/detail on how rules should be applied.
Tax legislation can be complex to understand and open to misinterpretation, so SOPs provide guidance.
Extra-Statutory concessions (ESCs)
Description and notes
ESCs allow a relaxation of the strict letter of tax law.
HMRC publish current ESCs and taxpayers can rely on these.
HMRC can make an ESC to administer the tax system fairly and effectively but cannot counter the clear words of tax law.
An ESC confirms that HMRC will apply a tax law to a specific group in a more favourable way than another possible interpretation, to avoid undue hardship, unfairness, or an illogical result
Internal HMRC manuals
Description and notes
Produced for their staff, give guidance on the interpretation of the tax.
Available to public as well.
HMRC website, leaflets, and booklets
Description and notes
Explanations of tax issues in non-technical language.
Aimed at public
HMRC Briefs
Description and notes
Technical guidance on a specific tax issue that has arisen in the year
Aimed at tax advisors
