Taxation (UK) · Principal sources of revenue law and practice

HMRC Practice: Statements, Manuals and Guidance Explained

Updated 11 October 2026 · Fact-checked

HMRC practice is how HMRC says it will apply tax law. It is published in statements of practice, extra-statutory concessions, manuals, briefs and guidance. None of it is law. Statute and case law bind everyone. HMRC practice shows HMRC's view, and a taxpayer may rely on it in some cases, but a court can override it.

Understand HMRC Practice: Statements, Manuals and Guidance

UK tax law comes from Acts of Parliament and from decisions of the courts. Statute and case law are the only binding sources. Everything else is HMRC practice.

HMRC publishes practice because the law is often unclear or silent on detail. Taxpayers and advisers need to know how HMRC will treat a situation before they file a return. HMRC therefore explains its view in several forms.

Statements of practice set out how HMRC interprets or applies a rule in a general way.
Extra-statutory concessions were published as a relaxation of the strict legal position, usually to avoid an unfair result. Their use has been reduced over time, and many have been put into legislation. Treat any concession you see as a historic concept and focus on what the question gives you.
Manuals are HMRC's internal guidance to its own staff, for example on enquiries or on how to apply a particular tax. They are published so the public can see them.
Briefs and other guidance are notices, leaflets and online guidance telling taxpayers how HMRC views a change or a point of law.

The key idea is status. HMRC practice has no legal force of its own. If HMRC's view conflicts with the statute or a court decision, the law wins. HMRC cannot lawfully collect tax the legislation does not impose, and a court is not bound by what HMRC says.

In practice, though, HMRC usually follows its published guidance. If a taxpayer follows it in good faith, they can often expect HMRC to apply it to them too. That expectation is not a legal guarantee, so it is not a safe basis for planning where the law clearly says otherwise.

For ACCA TX-UK, you must know the order of authority, what each type of HMRC publication is, and that none of them is binding law. The exam expects you to apply rates and rules in the Tax Rates and Allowances document, not to quote manuals.

Key rules to remember

Order of authority: Statute and case law (binding) > HMRC practice (persuasive, not binding); If HMRC practice conflicts with the law, the law prevails.
Statements of practice: Statement of practice = HMRC's general published interpretation of how it applies the law; Not law. Taxpayers can usually expect HMRC to follow it, but a court is not bound.
Extra-statutory concessions: Concession = relaxation of the strict legal position, published by HMRC; Has no statutory force. Many have been replaced by legislation, so do not assume a concession still applies.
Manuals: Manual = HMRC guidance to its own staff, made public; Shows how HMRC will behave. It is not law and does not bind the courts.
Briefs and guidance: Brief or guidance = HMRC's communication to taxpayers about its view of a change or point; Persuasive only. Check it against the legislation.

How to solve HMRC Practice: Statements, Manuals and Guidance questions

Use this method for any question about the status or use of HMRC practice.

1Identify the source the question names: statute, case law, statement of practice, concession, manual, brief or guidance.
2Classify it as binding (statute or case law) or non-binding (all HMRC practice).
3State what the source is: for example, a manual is HMRC's internal guidance to staff made public.
4Say what happens if it conflicts with the law: the law prevails and a court is not bound by HMRC's view.
5Add the practical point: HMRC usually follows its own published guidance, so taxpayers often rely on it, but it gives no guarantee.
6Apply this to the scenario and give a clear conclusion in one sentence.

Quickest way: Binding or not: a two-question check

When to use it: Use this for Section A and OT case questions that ask which source is legally binding or what status something has.

Ask: was it made by Parliament or decided by a court? If yes, it is binding law.
If it was published by HMRC, it is practice and is not binding.
If two options look right, pick the one that says HMRC practice cannot override statute.
Reject any option that says a manual or statement of practice is law or binds the courts.

Common mistakes in HMRC Practice: Statements, Manuals and Guidance

Saying HMRC manuals are legally binding.
HMRC staff follow manuals closely, so they look like rules.
Fix: Remember that manuals are internal guidance made public. Only statute and case law bind.
Thinking a statement of practice overrides the Act.
Students assume the tax authority's view is the final word.
Fix: State that if practice conflicts with the legislation, the legislation prevails.
Assuming extra-statutory concessions still apply as law.
Older notes treat them as a live source of relief.
Fix: Treat a concession as a non-statutory relaxation that many have been replaced by legislation. Use the rules the question gives you.
Saying HMRC practice is irrelevant.
Over-correcting after learning it is not binding.
Fix: Say it is persuasive and shows how HMRC will behave, even though it is not law.
Mixing up the order of authority with case law.
Students blur court decisions and HMRC views.
Fix: Put statute and case law together as binding, then HMRC practice below them as non-binding.

Worked examples

Example 1

A client says: "HMRC's manual says my expense is allowable, so it must be allowable by law." Explain whether this is correct.

Show the solution

Identify the source: an HMRC manual.
Classify it: a manual is HMRC's guidance to its staff, published for the public. It is HMRC practice, not law.
Apply the order of authority: only statute and case law are binding.
Conclude on the practical effect: HMRC will usually follow its manual, but if the legislation or a court decision says otherwise, the law prevails.

Answer: The client is not correct. The manual shows how HMRC will normally behave, but it is not law. Whether the expense is allowable depends on the legislation and case law.

Example 2

Which of the following is legally binding on the courts? A) A statement of practice B) An HMRC manual C) A decision of the courts on a point of tax law D) An HMRC brief

Show the solution

Statements of practice, manuals and briefs are all published by HMRC. They are HMRC practice.
HMRC practice is not binding on the courts.
A court decision on a point of tax law forms case law, which is binding according to the rules of precedent.

Answer: C) A decision of the courts on a point of tax law

Exam tips

Learn one sentence: only statute and case law are binding; all HMRC practice is persuasive only.
In objective questions, eliminate any option that calls a manual, statement of practice or brief law.
In written answers, give the status, then the practical effect, then the conflict rule. That earns the marks.
Do not quote manual numbers or paragraph references. The exam does not ask for them.
Use the Tax Rates and Allowances document for figures. HMRC practice questions test principles, not numbers.

Practice questions from Principal sources of revenue law and practice

HMRC Practice: Statements, Manuals and Guidance: frequently asked questions

Are HMRC manuals legally binding?

No. Manuals are HMRC's internal guidance to its staff, made public. They show how HMRC is likely to apply the law, but they are not law and do not bind the courts.

What is the difference between statute law and HMRC practice?

Statute law is made by Parliament and is binding. HMRC practice is HMRC's published view of how it applies the law. If the two conflict, statute prevails.

What is a statement of practice?

It is a published HMRC statement of how it interprets or applies a rule in general. Taxpayers can usually expect HMRC to follow it, but it is not law.

Do extra-statutory concessions still matter for TX-UK?

They are mainly a historic concept, as many have been replaced by legislation. Know that they were non-statutory relaxations, and rely on the rules given in the exam instead.