HMRC Guidelines for Compliance explained

Guidelines for Compliance (GfC) are HMRC publications that set out its view of tax areas it considers complex, widely misunderstood or novel, along with the errors it sees and the approach it recommends. They are not law and you do not have to follow them, but following them is one of the clearest ways to show you took reasonable care, which is the main defence against inaccuracy penalties.

What are HMRC’s Guidelines for Compliance?

HMRC announced the guidelines in November 2021 and published an overview, “About Guidelines for Compliance”, on 6 October 2022. HMRC describes them as a suite of products for businesses (including public bodies), individuals and their advisers. Each guideline takes one risk area and explains three things: how HMRC reads the law, which approaches tend to lead to errors and assessments, and what a lower risk approach looks like in practice.

The difference from the HMRC internal manuals is one of purpose. The manuals interpret the law for HMRC staff. The guidelines stay within those views but go further into practical application and administrative approach: what records HMRC expects, what it looks for when it checks a claim and which shortcuts it regards as risky. HMRC says it asks advisers, professional bodies and industry to help develop them where it can, and accepts that many agents will read them on behalf of clients.

Which topics does the series cover?

The GOV.UK collection groups the guidelines by area. As at October 2026 it lists the following.

Area	Guidelines
Corporation Tax	GfC3 research and development qualifying work; GfC9 Patent Box computations; GfC16 imported hybrid mismatches
Capital allowances	GfC5 errors in plant and machinery allowance claims
Transfer pricing	GfC7 common risks in transfer pricing approaches
VAT	GfC2 apportionment of consideration; GfC8 VAT compliance controls; GfC11 remedial works; GfC18 place of supply in the oil and gas sector; GfC20 fund management services; GfC21 cryptoassets
Employer duties	GfC1 PAYE Settlement Agreement calculations; GfC4 the reformed off payroll working rules; GfC10 Apprenticeship Levy and Employment Allowance for connected entities; GfC19 short term business visitors
Cross tax	GfC6 football agents’ fees; GfC12 labour supply chain assurance; GfC13 making sure documents filed with HMRC are correct and complete; GfC14 Freeports; GfC15 Investment Zones; GfC17 sharing group structure information

The most recent addition at the time of writing is GfC21 on VAT and cryptoassets, published on 15 October 2026. Several older guidelines have been revised, for example GfC5 was updated on 27 July 2026, so it is worth checking the date on the version you rely on.

Most of the series is aimed at businesses with specific exposures. The one with the widest reach is GfC13, because it applies to any return or document filed with a declaration that it is correct and complete, including Self Assessment returns for Income Tax, Corporation Tax and VAT. The guideline on the off payroll working rules (GfC4) and the one on capital allowance claims (GfC5) are the others most likely to reach smaller clients.

Are the guidelines binding, and do they give a safe harbour?

No on both counts. HMRC’s overview says plainly that you do not have to follow the guidelines, that the guidance in its technical manuals remains its view of the law, and that the guidelines are not “safe harbours”: HMRC may still check a return that adopted an approach described in a guideline. You remain responsible for self assessing in line with the law.

GfC13 makes the same point from the other direction. You do not have to agree with HMRC’s view and may have good reason to believe an alternative view is, on balance, most likely to be correct. What HMRC expects is that you adopt the interpretation you believe is most likely correct, not the one that is most financially advantageous.

The guidelines also have a formal role for large businesses. HMRC states that they are one of the places where its “known position” can be found for the purposes of uncertain tax treatment notification, which affects only large businesses and only treatments with tax consequences of more than £5 million. Departing from a position set out in a guideline can therefore be one of the triggers for notification.

How does following a guideline reduce the risk of penalties?

Under Schedule 24 to Finance Act 2007 an inaccuracy that is careless incurs a penalty, and the law defines careless as a failure to take reasonable care. HMRC’s Compliance Handbook at CH81120 explains that reasonable care is judged against the person’s abilities and circumstances, and that a person who meets an unfamiliar transaction is expected to find out the correct treatment or take advice. If they are still unsure and draw attention to the point when they file, HMRC accepts they will not have been careless if they turn out to be wrong.

The guidelines plug into that test in three ways:

• They show what a careful person would have checked. GfC5, for instance, says many capital allowance errors come from assumptions rather than checking the facts, and that fully checking the facts helps show you met your obligation to take reasonable care.
• They tell you how to flag doubt. GfC5 suggests that where a claim treats building or structural items as plant, an explanation with the return setting out your view of the law may reduce the need for HMRC contact and help show reasonable care.
• They warn what HMRC will take into account. GfC13 states that if you file a position you do not reasonably believe to be correct, HMRC will take this into account when it considers penalties.

Following a guideline does not prevent an assessment for the tax and interest if HMRC disagrees, but it makes a careless penalty much harder to sustain. For how penalty percentages work once an inaccuracy is found, see our guide to penalties for errors in tax returns.

What does GfC13 expect when a position is uncertain?

GfC13 says it does not expect to change anything for most taxpayers. It is aimed at those considering a novel or improbable interpretation of the law, or who remain uncertain after making their best efforts. Its main recommendations are:

1. Establish the facts properly, for example by checking contract wording and confirming where activities actually happen rather than assuming.
2. Check HMRC guidance and the legislation, and take advice from an adviser “trained and competent for the task at hand” if still uncertain. You are expected to give the adviser full facts and to check the advice applies to your transactions.
3. Consider whether a statutory clearance or a non statutory clearance is available.
4. If significant uncertainty remains, tell HMRC alongside the return under the heading “Novel or uncertain position”, giving your name and reference, the issue, the interpretation applied and its effect on the tax.
5. Keep records of the steps taken to reach your conclusion, up to the relevant statutory time limit.

For Income Tax and Corporation Tax the disclosure can go in the white space or computations. Customers without a Customer Compliance Manager can email noveloruncertainpositions@hmrc.gov.uk. A valid uncertain tax treatment notification, or a valid disclosure under the disclosure of tax avoidance schemes rules, is treated as an explanation for the purposes of the guideline.

What does this look like in practice?

Illustration only. A manufacturing company spends £400,000 fitting out a new unit and its adviser treats most of the cost as plant. Reading GfC5, the finance director notices the guideline’s warnings about structural items and about assuming when expenditure is incurred under a contract. She asks the adviser to split the costs by item, checks the build contract for when obligations became unconditional, and keeps the analysis. One item, a mezzanine floor, is borderline, so the return includes a short note explaining the treatment and why it was adopted. If HMRC later disagrees on the mezzanine, the tax and interest will be due, but the company has strong evidence that the error was not careless.

What mistakes do people make with the guidelines?

• Treating them as optional reading. They are optional to follow, but HMRC caseworkers use them as the benchmark of what a careful taxpayer would have done.
• Assuming compliance means no enquiry. HMRC says expressly that they are not safe harbours.
• Relying on an out of date version. Guidelines are revised; check the update date on GOV.UK.
• Disclosing too little. A vague note that “a technical position has been taken” does not meet the GfC13 recommendation to describe the issue, the interpretation and its effect on the tax.
• Relying on generic advice. GfC13 expects advice to address your specific facts; see also our guide on relying on HMRC advice.

General questions about the series go to ccgguidelinesforcompliance@hmrc.gov.uk, and each guideline names its own contact.

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Related Accountapedia entries

• Is relying on an accountant reasonable care
• Making a voluntary disclosure to HMRC
• Penalties for errors in an inheritance tax account
• Penalties for third parties who supply false information
• Penalties for errors on VAT returns

Sources

• GOV.UK: Guidelines for compliance
• GOV.UK: About guidelines for compliance
• GOV.UK: Manual page CH81120
• GOV.UK: Common areas of error in claims for plant and machinery allowances par
• GOV.UK: Recommended approach to claims and record keeping part 3
• GOV.UK: Purpose scope and background part 1
• GOV.UK: Filing your tax return part 2

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.