What happens once a counteraction notice is issued under section 90 of TIOPA 2010?

Once a counteraction notice is given under section 90, the tax advantages identified in the notice must be counteracted by means of adjustments. HMRC makes appropriate changes to the taxpayer's position, such as amending returns, making assessments, or modifying claims, to neutralise the inappropriate double taxation relief obtained through schemes or arrangements.

What types of adjustments can HMRC make under section 90 of TIOPA 2010?

HMRC can make various adjustments including amending a self-assessment return, issuing an assessment, or modifying a claim or election made by the taxpayer. The purpose of these adjustments is to put the taxpayer back into the position they would have been in had the arrangement not produced the inappropriate tax advantage from excessive double taxation relief.

Why is section 90 of TIOPA 2010 important for counteracting double taxation relief abuse?

Section 90 provides the essential enforcement mechanism by which HMRC follows through on counteraction notices. It gives HMRC the legal basis to make necessary changes to a taxpayer's position, ensuring that any excessive or inappropriate double taxation relief obtained through artificial arrangements is properly reversed and the correct tax becomes payable.

Can HMRC amend a company's corporation tax return under section 90 of TIOPA 2010?

Yes. Under section 90, HMRC can amend a company's corporation tax return to reduce excessive double taxation relief claimed through artificial arrangements. For example, if a company routed income through intermediaries to generate credits for foreign tax on the same income in two countries, HMRC can adjust the return so only legitimately due relief is granted.

Taxation (International and Other Provisions) Act 2010 section 90

Consequences of counteraction notices

Section 90 sets out what happens once a counteraction notice has been issued under the provisions dealing with schemes and arrangements designed to increase double taxation relief.

Once a counteraction notice is given, the tax advantages identified in the notice are counteracted by means of adjustments
Adjustments may be made to the claimant's tax position, including assessments, amendments to returns, or modifications to claims or elections
The adjustments give effect to the counteraction and ensure that the inappropriate tax advantage is neutralised
The section provides the legal basis for HMRC to make the necessary changes to a taxpayer's position following the issue of a counteraction notice

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