13 January 2022 
Andrea Marshall, Tax Specialist
We have sought clarification from HMRC as to how the Uncertain Tax Treatment limits apply to subsidiaries of universities, given that universites themselves are excluded as they are within the definition of a "public Body". Our question and HMRC's response are below.
BUFDG’s question
We understand that universities themselves will fall outside [the Uncertain Tax Treatment] measure because they are included within the definition of a public body under Section 3 of the Freedom of Information Act 2000. However, we understand that subsidiaries of universities are included within the measures.
Our question is: given that the university is excluded from UTT, how do we determine if the UTT threshold limits of £200m turnover/ £2 billion balance sheet are exceeded?
Do we
We are not sure given that the parent in group (i.e. the university) falls outside UTT.
HMRC’s response
Public Bodies do not satisfy the criteria of ‘company’ within paragraph 2(1) (of Sch.15 to FB(No.2)21) and are therefore not within scope of the UTT legislation. However, if the Public Body has an incorporated subsidiary that satisfies the criteria in paragraph 2(2), that subsidiary is within scope.
The turnover and balance sheet of the Public Body is not included when calculating the threshold of the subsidiary because a company is only a member of a group where it is 51% subsidiary of another company, and Public Bodies are not a ‘company’ for the purposes of UTT.
Clarification can be found regarding the exclusions of a ‘company’ in paragraph 2 with paragraph 2(1)(b) and 2(1)(d) confirming specific exclusions for public bodies.
Although Public Bodies are not within scope of UTT, subsidiaries of a Public Body are included, and where there is more than one subsidiary in the group, their turnover and balance sheet amounts must be aggregated to determine whether the thresholds are met.
