Guidance

Draft guidance for the advance tax certainty service

Published 10 December 2025

This draft guidance reflects the position of the process during the first year of the policy. It is subject to change in line with the parliamentary process of the Finance Bill and will be finalised ahead of the formal launch of the service in July 2026.

1. Introduction

1.1 Legislative reference

This is a guide to the advance tax certainty service as provided for by the Finance Bill 2025 to 2026.

1.2 Intention of guidance

We have produced this guidance to support HMRC and its customers in understanding how the advance tax certainty service works in practice.

It outlines who is eligible for the process, as well as the scope of taxes for which advance tax certainty can be provided.

This guidance only covers the advance tax certainty service.

HMRC will continue to update this guidance as the service progresses.

1.3 Overview of the advance tax certainty service

The advance tax certainty service is part of the government’s commitment to boosting long-term economic growth in the UK and generating certainty for taxes administered by HMRC.

It is a dedicated service for major investment projects. It provides a clear position on how HMRC will apply tax legislation to a project. This service builds on existing support offered by HMRC that provides certainty across a broad range of investments.

We want this to be a collaborative and transparent service that:

• delivers tax certainty efficiently
• supports confident investment decisions
• provides certainty on complex tax issues is a focused process
• relies on active engagement from HMRC, yourself, and your advisors

Before you apply, you should make sure you have the resources and availability to work at pace and in partnership with HMRC. We anticipate an approach built on regular conversation, open sharing of information, and responsiveness to requests. Without this level of engagement, it will be difficult to achieve the policy objectives and provide certainty within the desired timeframes.

A clearance produced as part of the advance tax certainty service provides HMRC’s view of how the tax rules apply upfront in writing. We aim to provide a 90-day turnaround from formal submission to providing clearance. This will depend on the complexity of the case and be subject to discussion and agreement with you. The process will typically follow the steps:

1. Before submitting a formal clearance request, you can request an early engagement discussion with HMRC to set out your proposal. This will allow you and HMRC to check if clearance is likely before committing resources to the process.

2. You may submit a clearance request in writing to HMRC, with a clear technical analysis of the position and including any supporting information. HMRC will triage applications to check eligibility, scope and any critical timing considerations before acceptance into the process.

3. Within 21 working days of submission, if you’re successful, we will discuss and agree the deliverable scope and timeline as part of a scoping and planning meeting. You can speak directly with the advance tax certainty service team, subject matter experts, and caseworkers in further detail beyond the initial written submission.

4. HMRC specialists will then consider the relevant facts and technical analysis, seeking clarification or further information from you if needed. We’ll agree a timeline for completion of the clearance after the scoping meeting, identifying the key milestones.

5. HMRC aim to issue you with a clearance within 31 working days of the planning and scoping meeting, if you’re successful. This may vary depending on the complexity or availability of information. This document will set out the scope and duration of clearance, the key facts on which the clearance relies, and key assumptions for continued reliance on the clearance.

A clearance lasts for up to 5 years or until the project ends. If your project lasts longer than 5 years, you can apply to renew your clearance. You can renew your clearance more than once.

Throughout the length of the clearance, you’ll need to provide information to HMRC confirming that you continue to act in accordance with the position set out in the clearance.

2. Eligibility and scope

2.1 Who can apply for a clearance

A qualifying person may apply for a clearance. This can be the person who is incurring the project expenditure or a person who controls it. In most cases, a qualifying person will be a company.

Where no single person has overall control (such as in the case of a joint venture (JV)), or there are multiple interested parties (such as a consortium), one qualifying person may apply on behalf of the qualifying persons.

Both UK and non-UK resident entities investing in the UK may apply.

If the investment entity does not yet exist, a qualifying person who will control it can apply. The clearance would be binding in relation to the entity or entities named as incurring the project expenditure, and not the applicant.

2.2 Financial threshold for entry to the process

The threshold for entry is £1 billion of qualifying project expenditure in the UK over the lifetime of the project. This amount would be reflected in a corporate business plan or authorised project spend. It should not have already been included in a tax return.

HMRC wants to be practical and align with how businesses normally work when checking if you meet the threshold. To keep the service high quality during its first phase, HMRC defines a ‘project’ for threshold purposes as either:

• one standalone project
• a group of approved, very similar projects that share the same tax uncertainty

Where only phase 1 is authorised, in recognition of the stage-gated nature of very large projects, the projected cost of subsequent phases could be taken into account.

HMRC aims to work with business as the service becomes more established. It will refine the scope of project to better accommodate businesses’ approach to project boundaries and planning.

Qualifying project expenditure is all UK expenditure on the project except for the exclusions set out in this guidance. That means spending on goods and services that are used or consumed in the UK or the UK continental shelf. This includes the acquisition of tangible assets, like plant and machinery, and intangible assets, like software.

The amounts invested should be easily identifiable as being ‘located’ in the UK, such as being an investment in an asset located in the UK, or staff located in the UK.

For example, on a project to build a power station in the UK, engineering services provided by a person not located in the UK should be clearly for the project in scope rather than your existing operations.

The investment project must also be a new initiative involving significant investment, with significant being determined by reference to the £1 billion financial threshold.

Financing costs will not be included within qualifying expenditure.

The qualifying expenditure should exclude amounts which are used for investment in equity. This is to prevent transactions which may just be an acquisition of existing UK assets rather than genuine investments which create new assets (for example, transactions which are solely mergers and acquisitions, as well as share buybacks).

It must not be an ongoing, ordinary part of business activity but a new investment. This is to make sure the project meets the objective of facilitating new investment in the UK.

2.3 Which taxes are in scope of a clearance

Where they are material to the investment project, HMRC will offer clearances on the following areas:

• Corporation Tax

• VAT

• Stamp Duty Land Tax

• Income Tax

• PAYE regulations

• Construction Industry Scheme

2.4 Who is excluded from applying for clearance

If you have committed fraud under statute or common law, you are excluded.

Examples of when you are excluded from the process include, but are not limited to, when you have:

• committed the common law offence of cheating the public revenue
• committed an offence under the law consisting of being knowingly concerned in the fraudulent evasion of tax
• been recently liable to a penalty under Section 69C of the VAT Act 1994, or Section 25 of the Finance Act 2003
• received a deliberate penalty under Schedule 24 of the Finance Act 2007 or Schedule 41 of the Finance Act 2008
• entered into or carried out arrangements that are abusive under the meaning given in Section 207 of the Finance Act 2013, or where adjustments have been made under Section 209 of the same act
• incurred a defeat in respect of notifiable tax arrangements under Schedule 17 of the Finance (No.2) Act 2017 (DASVOIT) or Part 7 of the Finance Act 2004 (DOTAS)
• admitted to deliberate underpayment of tax under Code of Practice 8 or Code of Practice 9 proceedings
• reached agreement with a prosecutor under a Deferred Prosecution Agreement

This also includes when you are under the special measures regime (Finance Act 2016)

If you’ve had certain penalties, you cannot use this clearance service for at least 5 years. This applies if you:

• received a deliberate penalty
• received a deliberate and concealed penalty
• received any of the penalties listed in the bullet points in section 2.4

The 5-year period starts from the date you entered the special measures’ regime or received the penalty.

This list is not exhaustive.

2.5 Where HMRC will not offer a clearance

As will be set out in a statutory notice, HMRC will not offer clearances on the following, including, but not limited to:

• subject matters outside HMRC functions but relevant to tax (such as the accounting treatment of a given transaction)

• taxes where administration and compliance are fully devolved (such as Land Transaction Tax (Wales), or Land and Buildings Transactions Tax (Scotland), and business rates)

• areas where HMRC is reliant on another tax authority for a part or whole of an answer (such as cross-border transfer pricing)

• areas that are subject to negotiation with another tax authority (such as matters subject to Mutual Agreement Procedure (MAP))

• draft legislation which has not yet been passed by Parliament

• certain transactions which are not material to new investment in the UK economy and do not meet the main policy objective (for example, if you were to bring £1 billion of cash onshore and initiate a share buyback)

• the valuation of assets

• areas where there are existing mechanisms to provide certainty (such as treaty interpretation, corporate migration, Advance Pricing Agreements (APA), Advance Thin Capitalisation Agreements (ATCA) or Partial Exemption Special Method (PESM))

• transactions that are speculative or not under serious consideration by you

• application of the General Anti-Avoidance Rule (GAAR)

• the treatment of transactions which, in HMRC’s view, are for the purposes of avoiding tax

• where an existing statutory clearance is applicable to the transaction

• either the application of the ‘settlements legislation’ in chapter 5, part 5, of the Income Tax (Trading and Other Income) Act 2005 or tax consequences of executing non-charitable trust deeds or settlements

• the venture capital schemes (parts 5 to 6 of the Income Tax Act 2007)

HMRC will also not offer clearances on the following:

• anti-avoidance provisions which usually have the heading, ‘anti-avoidance provision’, ‘targeted anti-avoidance rule’ or simply ‘anti-avoidance’

• the application of main purpose or motive tests

HMRC will offer you a view, where appropriate, that there is a low risk of a future compliance intervention on the unallowable purpose rules in the loan relationships and derivative contracts regimes, with draft guidance to be issued alongside the notice.

HMRC will not:

• generally offer a clearance on matters of fact, but will consider such matters on a case-by-case basis
• provide a clearance in the following scenarios:
  • where HMRC is actively checking your tax position for the period to which the application relates (in such cases, you should contact the HMRC officer responsible for the compliance check to discuss the relevant matters)
  • where the application relates to a transaction or period for which the relevant tax return has already been submitted and finalised

These exclusions help make sure the integrity of the process and maintain its focus on genuine, well-supported applications.

While HMRC do not give clearances on draft legislation which has not yet been passed by Parliament, HMRC will explore giving a view from policy professionals on the affect of legislation on your investment where relevant.

Where it is not feasible to give a clearance on certain issues within the relevant timeframe, as determined by HMRC during early engagement, HMRC can choose not to give a clearance on such issues. Equally, HMRC may decide that there is no guarantee that the critical assumptions provided by you can be materially adhered to.

For example, HMRC may choose not to give a clearance on payroll taxes for highly mobile individuals because their tax residence is subject to the personal choices of that individual, rather than the employer. If relevant, these situations will be fully discussed with you at early engagement and scoping meetings.

3. Process

3.1 How HMRC will manage capacity in the first year of the service

During the initial year of the advance tax certainty service, interest in the service might exceed HMRC’s available capacity. To maintain high standards and allocate HMRC’s resources effectively during this phase, an expression of interest (EOI) and triage process may be implemented to help manage applications.

This process will require those seeking advance certainty to email the advance tax certainty service, providing key project details such as investment scale, deadlines, and relevant tax areas. An expression of interest will be assessed based on complexity and urgency using the submitted information. For the first year, HMRC aims to make sure a balanced selection of projects across different tax regimes and sectors, scheduling them throughout the year to maintain service quality and manage workload.

Complexity will be judged by the nature and number of significant transactions that involve novel or unclear tax issues needing interpretation. Applications with several such challenges, or those needing expert advice (whether legal, technical, or sector-specific) will be viewed as more complex.

Immediacy will be measured against factors like upcoming transaction deadlines, legal or regulatory filing requirements, and the potential affect on business continuity or compliance risk. By prioritising time-sensitive cases, HMRC supports timely decision-making and reduces disruptions to business investment.

If interested parties are not initially invited to submit a full application, alternative routes to certainty will be discussed with you, which could include postponing the application to a later date. If no other satisfactory alternative is available, the clearance request will be declined.

By applying these guidelines, HMRC can allocate its resources fairly and efficiently, giving priority to cases with the highest level of tax uncertainty and urgency.

After the first year of the advance tax certainty service, the process set out from section 3.2 onwards will apply.

3.2 Requesting an early engagement meeting

Before submitting a formal clearance application, you should request an early engagement meeting by contacting the advance tax certainty service mailbox. Where you have an existing customer compliance manager (CCM) or temporary customer compliance manager (tCCM) point of contact, they should be copied into the request.

If you’re a mid-sized businesses and you do not already have a temporary customer compliance manager, we will assign one to you for the duration of the advance tax certainty process, once you submit an eligible formal clearance application.

Request emails should indicate:

• the nature of the project

• the anticipated project expenditure and likely duration

• any critical commercial deadlines affecting the date by which you requires a clearance

• the likely tax issues that you are seeking certainty and an indication of materiality (for example, capital allowances — qualifying expenditure — of around £100 million)

• any eligibility queries you might have

• signed email protocol form

Early engagement meetings are key to understanding what the clearances process can offer within desired timeframes. Any uncertainties before submitting a formal clearance application may also be addressed, enabling efficient use of the process and reducing unnecessary costs.

HMRC will aim for early engagement meetings to take place within 10 working days of contact being made.

3.2.1 Early engagement discussion areas

This facility will allow you to have an initial conversation with HMRC on aspects of their proposed application, such as:

• their eligibility for the process in terms of the qualifying threshold and exclusion criteria

• whether certainty for the clearance subject matter is already covered by an existing process (for example, another statutory process) that takes priority

• whether the clearance subject matter is within the scope of taxes or issues covered by the process

• the feasibility and timing for complex or time-critical clearances

• the timing of any application in relation to whether enough facts will be available to support a clearance

• the degree of change anticipated to facts and circumstances within the clearance application

• supporting facts and evidence HMRC anticipate will be required in order to issue a clearance

• potential synergies or links with other processes

• other areas that HMRC consider the clearance should cover on the same facts

• any issues with service capacity versus demand

• secure data transmission and permissions

3.2.2 Who should attend an early engagement meeting

HMRC recommend that you or your representatives with knowledge of the project (tax or finance lead) attend the meeting, and your agent if one is to be used for the process. Depending on the nature of the query, you may be joined by one or more of the following in the meeting:

• a clearance team subject matter expert, based on the nature of the prospective clearance to be discussed

• a customer compliance manager, temporary customer compliance manager or a tax or subject matter specialist

• a clearance team administrator to provide administrative support

The advice given during this meeting will be summarised. Any actions recommended to you regarding preparing their clearance application will be shared in writing.

3.3 How to submit a formal clearance application to HMRC

3.3.1 Format

Clearance applications should be made in writing to the advance tax certainty service mailbox, copying in the customer compliance manager or temporary customer compliance manager (where applicable).

Clearance applications should be made by you, or your appointed agent notified to HMRC to act on their behalf. Where an application is submitted by an agent it is important that a named business representative has reviewed the application before submission.

HMRC use secure digital channels to make communication as straightforward as possible. You can email HMRC, but you should read guidance about the risks. When sending the initial contact, you should also complete and attach the email authorisation form.

If you prefer not to use email (particularly where information is commercially sensitive), HMRC can arrange an initial call and provide a secure file-sharing option for all document exchanges. Once agreement is in place to use this service, HMRC will communicate by email for routine matters, and all files will be exchanged using HMRC-approved secure methods.

Applications should include a cover letter, clearance application, and annex of supporting information.

3.3.2 Content of clearance applications to HMRC

Clearance applications should include a cover letter outlining the following:

• the basis on which you consider that you have met the eligibility criteria and that the exclusion criteria do not apply

• written confirmation that the subject matter of the clearance sought has not been previously considered, or declined to be considered by HMRC (such as a non-statutory clearance, real time working, earlier enquiry or previous advance tax certainty service submission)

• a definition of the project scope (the business or objective boundary of the project used)

• written confirmation that any actions asked of you at the early engagement meeting with regard the application have been performed

• the commitment status of the project (for example, whether it has commenced or will do so imminently, whether spend has been authorised by the board, whether financing is in place)

• any key timing considerations or market or commercial sensitivities HMRC should be aware of

3.3.3 Application checklist

To make sure a you get an accurate clearance, you must be fully transparent and share all relevant facts with HMRC and provide timely responses to requests for further information. The advance tax certainty service follows the principle that you must be completely open and honest, and fully disclose all relevant facts to the tax authority.

The formal clearance application should include details on the applicant and application.

Information about the applicant and the application

If you apply for this service you must provide:

• contact details and the name and address of the entity incurring the project expenditure

• where available, the relevant customer identification number (for example, Unique Taxpayer Reference (UTR) or VAT Registration Number)

• a summary of the transactions and legal issues on which clearance is requested, with fuller details to be provided

• the first accounting period for which clearance is requested, including year-end date and filing deadline

Agents may represent you and apply for this service on your behalf. HMRC can only respond to authorised agents. If you want an agent to apply on your behalf, the agent must provide the following:

• name

• address

• telephone number

• email address

• authority to act on your behalf

If more than one entity is involved in the same transaction or project (such as in a joint venture or consortium), a joint application can be submitted to help reduce duplication and make sure consistency across all. A submission for a joint application must:

• identify all entities involved, including names, tax references (where available), and an explanation of organisational relationships

• provide a named contact for each entity, which must be you, or someone formally authorised to act on your behalf (written authorisation confirming representation should accompany the application)

• clearly set out the roles and responsibilities of each entity and how they relate to the clearance request (for example, owner or investor, or design and build subcontractor)

The joint application must be made by one qualifying person with written agreement from all other qualifying persons. HMRC will direct all correspondence, decisions, and updates to the nominated person. HMRC will need to discuss and establish permission and the approach to tax confidentiality between the qualifying person representing for example joint venture and consortium applicants.

Information about the transactions

The application must contain:

• details of which taxes the application refers to

• a full factual description of the transaction or project of sufficient depth to allow technical conclusions to be reached

• an official internal project business plan or investment case prepared for internal authorisation of the project spend, or external business case for raising finance

• the expected project duration and expenditure period

• a detailed analysis of the tax consequences of the transaction and the issues you want HMRC to consider for clearance

• the proposed date of the transaction, if it has not yet happened

• the duration of clearance sought (up to a maximum initial period of five years)

Information about Legal points

Your application must:

• outline the specific legislation you think applies

• provide a summary of the different interpretations and your reasoning for their interpretation conclusions (where you believe the application of the legislation is open to different possible interpretations)

• include copies of any advice already received which you are happy to disclose

Supporting information

To support a clearance application, you should provide:

• relevant objective factual evidence supporting the project or transaction description and technical conclusions

• written consent that you understand and accept the risk of using email to share information with HMRC

• written consent to use HMRC-approved secure methods, if not already provided

• your declaration that, to the best of your knowledge and belief, you have told HMRC about all the facts relevant to the investment and advice sought, and that these are correct

HMRC will work to produce further guidance on the format and content of applications ahead of the launch of the process to make sure all necessary information is provided and to help us process the request efficiently. However, HMRC will accept applications in any written format, provided they contain all the relevant details required for the clearance and are in English.

All supporting information should also be provided in writing and in English. Where supporting information is translated from another language, original language copies should also be included.

Supporting information should be provided in a digital format, with appropriate security to protect confidentiality. Applications made digitally should not also provide a hard copy.

3.3.4 Timing of clearance applications to HMRC

Clearances can be requested once a project is sufficiently defined to provide the necessary facts for a clearance to be given.

Clearance applications should be made to allow sufficient time for HMRC to review the application in full, request any additional information required, and determine their opinion in advance of the relevant filing date. This should be no later than 60 working days before the relevant date of filing of the first return which will include the transaction (earlier applications are advised for multi-opinion or complex matters).

As an advance certainty facility, clearances may not be sought on tax issues relating to returns that have been filed, or which were due to be filed.

3.4 How HMRC will acknowledge and process clearance requests

Within 3 working days, you will get an acknowledgement email from the advance tax certainty service confirming receipt of the application and setting out next steps. You’ll get an application reference number to be used in all future clearance correspondence and meeting summaries.

Within 5 working days of application submission, advance tax certainty service administrators will process clearance requests by:

• where necessary, checking applications meet eligibility criteria and that no exclusion criteria apply, clarifying information with you where this is unclear

• where necessary, reviewing whether other, more suitable routes to certainty are available

• checking the clearance submission contains all required information, including that identified and requested during the early engagement meeting

• identifying where the level of assumption required due to timing may prevent HMRC giving an opinion

• identifying the regimes and types of issue to be covered and assigning lead subject matter experts and potential technical partners in policy to consider the clearance

• establishing resource capacity based on required turnaround time

• flagging opportunities for linked advance pricing agreements with HMRC’s business, assets and international (BAI) transfer pricing team

• engaging customer compliance managers and temporary customer compliance managers to check the issue has not previously been considered under a clearance, enquiry or other compliance check

• extracting key details into a high-level summary for use in briefing and the scoping and planning meeting

Where information is not fully provided, HMRC will work with you to gather all necessary information, and the clearance process timeline will begin once this has been supplied. If, after this, an application for a clearance request still does not include sufficient information for HMRC to assess its acceptability, the advance tax certainty service will not begin a full review until the missing details are provided. You will be contacted promptly to explain what is needed and given a reasonable timeframe to supply the information.

If you do not respond or provide sufficient clarification within that timeframe, the request may be treated as withdrawn without further review. HMRC will treat the application as received on the date all relevant information has been provided.

3.5 What happens when an application is accepted into the clearance process

For successful requests, advance tax certainty service administrators will send an email to you confirming that the clearance has been accepted into the process and providing a named lead in the advance tax certainty service team.

This email will confirm the application reference number to be used in future correspondence with HMRC, as well as and set out details of how you may schedule the scoping and planning meeting, and what the process typically entails.

3.6 What happens when an application is not accepted into the clearance process

If HMRC considers that an application should not be admitted into the advance tax certainty service, advance tax certainty administrators will send you an email to tell you that HMRC is unable to provide a clearance and the reasons why.

Although there is no right of appeal or guaranteed entry to the advance tax certainty service, if you believe that HMRC has misunderstood the scope of the application or failed to consider a material fact resulting in determining the eligibility of a clearance request, you can contact the advance tax certainty service within 10 working days of receiving this email explaining the reasons why you believe HMRC has misunderstood the scope or eligibility should be set out for review by the advance tax certainty service team leader.

3.7 Preparing for the scoping and planning meeting

A scoping and planning meeting will usually take place within 21 working days from submission. This meeting is mandatory except where, in preparing for the meeting, HMRC determine that the clearance is straightforward, all relevant information has already been supplied, and customer timelines can be confidently met. In this circumstance, the advance tax certainty service team will email you confirming that all required information has been provided and asking if you are happy for HMRC to move straight to clearance review.

In this meeting, you will agree with HMRC the scope for the clearance, prioritising areas based on materiality that allow HMRC to give certainty within a realistic timeframe for the project.

Materiality for this purpose should be read as material to the post tax position of the project.

Any timing constraints, the lifespan of the project and the likelihood of any change will also be discussed with you. This will help HMRC to determine the maximum length of time a clearance could apply, how the clearance may be renewed if required, how critical assumptions will be monitored, and options available to you if the project scope changes.

The scoping and planning meeting will typically be attended by you and your agent (if you wish) and include the following:

• the advance tax certainty service administrator

• the named clearance lead contact with expertise for the regime/issue

• a representative from the HMRC’s Customer Strategy and Tax Design

• the customer compliance manager, temporary customer compliance manager and case team representative involved in ongoing compliance you

Following the scoping and planning meeting, HMRC will provide clarity on the next steps, including a written summary of the agreed scope and proposed timeline based on accurate and timely disclosure of any additional information required.

3.8 How HMRC will consider and evaluate clearances

The advance tax certainty service Team is responsible for managing all clearance requests. Each application will be considered by representatives from the advance tax certainty service, alongside relevant technical and policy specialists where necessary.

3.8.1 Timelines and communication

Where possible, HMRC will aim to have agreed a timeline with you during the scoping and planning meeting. Timelines will be tailored to the specific facts of each case, considering:

• the timing of any investment decisions

• the number and complexity of questions raised

• the volume of additional information required and timing of its provision

HMRC will ordinarily aim to issue a clearance within 31 working days from the scoping meeting or 49 working days from receipt of a complete application (for example, where all information required for HMRC to reach a view has been received). This is subject to agreement with you and the factors referred to above.

HMRC aim to complete reviews as quickly as possible. Providing a clear application with full disclosure and all relevant information helps HMRC to achieve this aim and provide certainty to you. If HMRC needs to wait for additional information, this may extend the process.

The advance tax certainty service team will provide regular updates against agreed timelines and any factors affecting those timelines. In the event the clearance consideration raises particularly complex issues that were not foreseen during earlier scoping and planning discussions, HMRC will aim to contact you within 14 working days to discuss a revised due date. You should contact HMRC if you need to revise their due dates.

In the event that a revised and extended timeline may go beyond the filing date for a return including the area on which certainty is being sought, the advance tax certainty service will work with the customer compliance manager or temporary customer compliance manager to make sure that a technical conclusion can be reached and applied consistently in reviewing the tax return where critical assumptions remain valid.

3.8.2 Evaluation process

Following the scoping and planning meeting and on receipt of any additional information identified as required at that meeting HMRC will:

• review the facts and supporting information contained within the application

• determine the correct tax treatment and compare that to the technical conclusions contained within the clearance, seeking policy input where required

• Identify whether a clearance can be given and the critical facts or assumptions on which it will be based

3.8.3 Engagement during the evaluation process

During the clearance evaluation HMRC may need to:

• seek clarification or further information from you where required

• engage in a collaborative discussion in respect of the matters requiring certainty

You are expected to:

• participate openly in discussions

• provide timely access to relevant supporting documentation and information

Where additional information is required to evaluate the application, HMRC will:

• contact you promptly

• agree the most suitable way to provide the information and set an appropriate deadline

If the requested information is not provided within the agreed timeframe, or you fail to engage on a timely basis with HMRC on issues relating to the clearance evaluation, this may delay HMRC’s ability to issue a clearance.

Where lack of engagement or information provision issues persist, this may result in HMRC declining to consider the application further.

3.8.4 Notification of changes during evaluation

If there is any change during the evaluation process that could affect the tax position for areas where certainty is being sought, you or your agent are required to tell HMRC as soon as possible.

Where the changes can be accommodated within the existing application or have little impact HMRC will work collaboratively with you to revise the application and continue the process.

If the change is significant and cannot reasonably be incorporated, a new application may be required. HMRC’s aim is to be flexible and consider how changes can feed into the existing clearance wherever possible.

3.8.5 Scope of evaluation

There is no automatic right of admission into the advance tax certainty service.

HMRC will only issue clearances on the matters that have been explicitly agreed as in scope for the application. HMRC will not consider all aspects of the wider project or the return of which it forms a part of as part of the process.

Where HMRC identifies additional matters as part of the application that are not in scope that require attention, these will be communicated to you separately.

If for any reason during the evaluation stage HMRC determines that an application cannot move to a clearance opinion, HMRC will tell you in the same manner as for ineligible clearances and the same right to review will apply.

3.9 Ending the clearance process early

Either you or HMRC may request to end the clearance process before the issuance of a clearance by withdrawing from the process under certain circumstances. This should be done using email and will be considered on a case-by-case basis.

For the customer, this may be permitted where, for example:

• it becomes clear that the clearance cannot be completed within the required timeframe

• the proposed investment or transaction is no longer proceeding, or has altered to an extent that HMRC agree a fresh clearance application is required

For HMRC, the process may be ended early where, for example:

• it becomes apparent that the application falls within HMRC’s specified exclusion criteria, outside of the scope of taxes or you no longer meets eligibility criteria

• you are asking HMRC to give tax planning advice, or to ‘approve’ tax planning products or arrangements

• the clearance subject matter may prejudice legal proceedings

• you or your agent’s behaviours and engagement levels are preventing the process moving forward

• the level of assumption asked of HMRC is such that determining a technical position is not possible

3.10 How a clearance will be issued and what to expect

3.10.1 Governance pre-issuance

All clearances under the advanced tax certainty service will be approved for issuance by a clearances approval board, comprising independent representatives from functions including policy, operations, legal, and subject matter experts, The panel’s role is to:

• review and approve the clearance teams’ recommended decisions on the clearance requested

• assure HMRC’s policy position and make sure consistency

• make sure compliance with the process essential criteria and an appropriate audit trail

• identify opportunities for legislative or guidance improvement to provide wider certainty for you

• confirm the critical assumptions selected for ongoing compliance monitoring

• make sure clearances clearly set out the consequences for you

3.10.2 Issuance

Once a clearance is drafted and approved through HMRC’s governance process, it will be:

• issued in writing to you

• recorded in a central repository

• shared with relevant HMRC compliance teams (for example, customer compliance managers, temporary customer compliance managers

The clearance contents will follow a standard format, though the depth and detail of each section may vary depending on the complexity of the case and the number of areas of certainty requested.

Where multiple points of certainty relate to the same fact pattern, a common summary of key facts will be provided to avoid duplication and make sure clarity.

3.10.3 Clearance format and contents

Clearances will include the following core elements:

• basic information (customer details, reference number, and date of issue)

• matters to which the clearance relates (summary of the issues and scope)

• HMRC’s position (confirmation of agreement or disagreement with the proposed tax treatment)

• key facts, assumptions and conditions

• duration and time-bound validity (typically up to 5 years, with conditions for renewal)

• monitoring and reporting (any annual reporting obligations or triggers for review)

• reliance and limitations (statement of binding effect and disclaimers)

• any market or commercial sensitivity flags

• confirmation governance checks have been completed

Clearances will not include tax advice or recommendations on how to structure transactions.

3.10.4 Feedback

If you take part in the first year of the advance tax certainty service, we’ll send you a mandatory questionnaire to give feedback on the service.

This will allow HMRC to build up performance data, which will be used to inform the next phase of the policy.

To help improve the service further, HMRC may wish to share the aggregate results from the feedback with partners in HM Treasury. If you are happy for this data to be shared, you’ll need to provide consent to HMRC allowing your data to be used for this purpose.

3.11 When HMRC does not agree with your tax position

3.11.1 Governance

All conclusions reached by the advance tax certainty service will be approved for issuance by the clearances approval board, regardless of whether HMRC can confirm your tax treatment is correct or is unable to do so.

3.11.2 Issuing ‘unable to agree’ opinions

Where HMRC is unable to agree that, based upon the facts fully disclosed, the tax treatment set out by you is correct, the advance tax certainty service team cannot proceed to issue a clearance binding with HMRC. HMRC will send a letter setting out that we are unable to agree.

3.11.3 Opinion format and contents

HMRC ‘unable to agree’ opinions will take the form of a written letter setting out that you are unable to confirm the tax treatment on which clearance has been sought is correct.

3.12 How clearance compliance will be monitored

3.12.1 Annual self-review

All clearances issued under the advance tax certainty service will be centrally monitored by HMRC to make sure consistency and integrity. However, you remain responsible for monitoring compliance with your own clearance throughout its duration.

As part of the clearance process, you’ll be able to discuss how critical assumptions will be monitored throughout the duration of the clearance. If the scope of the project changes but the critical assumptions are still met, or if there is uncertainty about whether they remain valid, you should contact HMRC to confirm whether the clearance continues to apply.

To support ongoing compliance, you will be expected to undertake annual self-monitoring of the clearance’s conditions, indicating how you are continuing to meet the criteria set out in the clearance. For large businesses with an assigned customer compliance manager, conversations around monitoring clearances can be included as part of any annual discussions. This provides an opportunity to review any relevant matters in a structured and collaborative way.

HMRC may request copies of the outcome of this self-monitoring, either through the customer compliance manager or the advance tax certainty team.

3.12.2 Requests for information

HMRC may request further information from you that might reasonably be required to check that the tax treatment in the clearance is still valid.

Failure to provide the requested information may result in revocation of the clearance and can result in a penalty of £5,000.

3.12.3 Legal developments post-issuance

To make sure a clearance remains valid and reliable, it is important that you reach out to HMRC to discuss any changes in law that could materially affect the clearance at the earliest possible opportunity.

Where such changes occur, or if there is uncertainty regarding whether a change is considered material, you should tell the advance tax certainty team immediately for further advice and guidance. HMRC can then work with you to provide confirmation of ongoing clearance validity where applicable and reduce the risk that you rely on an invalid clearance or having a penalty of £5,000 applied.

3.12.4 Factual changes post-issuance

HMRC recognises that with projects of this scale, how the expenditure is incurred may vary over time, especially if projects are phased or a series of linked investments. To make sure a clearance remains valid and reliable, it is important that you keep the advance tax certainty team informed of any material changes to facts upon which the clearance opinion and its critical assumption are based.

Where such changes occur, or if there is uncertainty regarding whether a change is considered material, you should tell the advance tax certainty team immediately for further advice and guidance. Failure to inform us of material changes may mean the clearance is no longer valid or cannot be relied upon and can result in a penalty of £5,000.

3.13 When a clearance may be modified

Clearances are issued based on the facts (including accounting treatment) and legal context provided at the time of application.

Where there is a material change to the facts on which the clearance was based, or to the relevant legislation or its interpretation by the courts (case law), the clearance may no longer be valid or binding. In such cases, you must tell HMRC.

3.13.1 Changes to the law

Where a change to relevant legislation of case law has occurred impacting a clearance, you may approach HMRC to get confirmation as to whether:

• you can continue to rely on the clearance, or the clearance ceases to apply and from what date

• HMRC can modify the clearance to remove elements where the opinion is no longer valid in the law whilst preserving the remainder of the clearance

HMRC’s intention is to narrow the clearance scope where it becomes partially invalid due to a change in the law, rather than render an entire clearance invalid.

3.13.2 Changes to facts

Your ability to rely on a clearance may be affected if:

• there has been a material change to the facts of an investment project from how it is set out in the clearance

• anything set out in the clearance, and which is material to it, such as a critical assumption, is no longer accurate

If you are unsure if a change is considered material, you should contact HMRC for advice. Failure to tell HMRC may mean the clearance is no longer valid, cannot be relied upon or may incur a penalty.

3.13.3 Requesting clarification or modification

Clearances are not modified for non-material changes of fact. Where there is uncertainty about whether a change is material, you are encouraged to contact HMRC for guidance.

To request a clarification of ongoing validity or a modification to a clearance, you should tell HMRC about the change as soon as it is identified. You should provide any updated information, including:

• revised facts and assumptions or revised technical position in law

• explanation of the change and its impact on the original clearance

• confirmation that no exclusion criteria now apply as a result of the change

• details of the clarification or amendment sought

HMRC will review the submission and determine whether:

• you can continue to rely on the original clearance

• the clearance can be modified

• the clearance is partially cancelled

• a new clearance application is required (where facts and assumptions are substantially different to the original clearance)

Modifications will be considered in the context of the original clearance and may follow a streamlined process where appropriate, particularly if the changes are limited in scope and the original submission remains largely valid.

In general, clearance modifications will be prospective and apply to the remaining term of the original clearance. The clearance duration is not extended. This is to make sure that:

• facts contained within applications are sufficiently known

• clearances remain an advance certainty service

• the service cannot be abused using piecemeal multiple amendments

It is therefore important that changes are communicated on a timely basis once decided. HMRC reserves the right to cancel a clearance where it considers the modification process is being used to seek to achieve a clearance outcome different to that which would have occurred if the modified scope, factual and legal position had been set out in a new application.

3.14 Clearance renewal

Advance tax certainty clearances are issued for a specified period, typically up to 5 years. Where a project extends beyond this timeframe and continued certainty is required, you must submit a renewal request to HMRC.

This renewal will be straightforward process. HMRC will use your original application and focus on:

• confirmation of any updates to the project or transaction

• reassessment of key facts and critical assumptions, upon which the original clearance relied upon

• a check against current exclusion criteria and legal framework

HMRC will work to produce a format for renewal applications ahead of the launch of the process, allowing you to efficiently confirm continuity or highlight changes.

3.14.1 Renewal process

At least 6 months before the clearance expiry, HMRC will issue a reminder to you that the active clearance is due to expire.

Where you wish to renew, you can submit a renewal application in writing setting out:

• whether the original facts and assumptions remain valid

• any updates to the facts or critical assumptions for the project whether any exclusion criteria now apply

• the duration of renewal sought up to 5 years

HMRC will review the submission together with the your customer compliance manager or temporary customer compliance manager and, if needed, may ask for more information. Where appropriate, HMRC will reissue the clearance, confirming the new validity period.

Where it is apparent to HMRC from the renewal request that a change to the areas of advance tax certainty is being sought, HMRC reserves the right to decline the renewal and direct you to a fresh clearance application. 

4. Governance and legal

4.1 Governance

All clearances will be reviewed by an advance tax certainty clearances approvals board. The role of the board is to:

• review the proposed clearances or clearance rejections against the advance tax certainty service process criteria

• make sure you provide consistent views of HMRC’s known policy position with downstream case work and non-statutory clearances

• make sure that the pre-issuance checklist has been completed and discuss areas for legislative and guidance improvement

A separate policy board will review the first year and oversee the development of the service.

4.2 How long a clearance is valid for

A clearance is valid for the lesser of the lifespan of the project or 5 years from the date of issuance.

While a clearance is valid, HMRC will be bound by the clearance. This means that you can rely on the determination of the tax treatment given by HMRC for 5 years from the date of issuance, if the following statements are all true:

• the facts and critical assumptions you have provided are true

• there are no changes to the statute to which the matter applies

• there is no new case law which means HMRC must take a different view

• there are no changes to generally accepted accounting practices which mean HMRC must take a different view

This means that you can rely on the certainty offered from HMRC for the duration of the clearance, provided you have fully disclosed all relevant facts and continue to operate as set out in the application.

Where a clearance ceases to apply due to case law and statute, you should contact HMRC to discuss how this affects your clearance. HMRC may be able to modify the existing clearance to accommodate the changes to case law or statute.

4.3 Who is bound by a clearance

The clearance is unilaterally binding on HMRC only. This means HMRC will be bound against changing its interpretation, but not against a court decision or changes in statute or generally accepted accounting practice that change how HMRC must view the relevant tax treatment.

HMRC will only be bound if you rely on the view and reflect this in your filing position. If you take a different filing position, HMRC are not bound by the clearance.

Where you file contrary to HMRC’s known position, it should consider whether it is within the scope of the Uncertain Tax Treatment) legislation. Read HMRC internal manual: Uncertain Tax Treatments by Large Businesses Manual for more information.

The clearance will be granted to the entity incurring the project expenditure, although a parent entity may apply on their behalf.

4.4 What happens if the law changes

Statutory powers will not be able to protect you from changes in the law. The law should be applied as the courts would apply it. Where the law changes in a way that materially changes the tax treatment agreed in the clearance, that aspect of the clearance would cease to apply, as appropriate.

4.5 What happens if case law changes

It is not possible to protect against changes to case law. Where a court decision that is binding and final changes how HMRC must apply the law, and does so in relation to a tax treatment agreed in the clearance, that aspect of the clearance would cease to apply.

‘Binding’ means decisions issued by a higher court than the First-Tier Tribunal and ‘final’ means the appellant cannot, has exceeded the time limit to or has been refused the right to appeal.

4.6 Modification and revocation of clearances

You cannot rely on a clearance if there has been a material change in the facts upon which the clearance was based. In these circumstances, a clearance may be wholly or partially revoked, or modified, by HMRC. Depending on the facts, HMRC will determine from what date the modification or revocation is effective.

HMRC may cancel a clearance if:

• information provided to HMRC in connection with the clearance is found to be false or misleading

• an aspect of the project is changed or information provided to HMRC is no longer accurate, such that critical assumptions are no longer met

• a request for information by HMRC in relation to the clearance is not complied with

Critical assumptions include exclusions for fraudulent or deliberately dishonest behaviour detailed at 2.4.

Clearances will be regularly monitored. In the event annual monitoring or notification of a material change indicates that grounds for revocation exist, this should be given effect in writing in standard format.

4.7 Appealing a decision

There is no right of appeal or guaranteed entry to the advance tax certainty service. If you believe that HMRC has misunderstood the scope of the application or failed to consider a material fact resulting in determining the eligibility of a clearance request, you can contact the advance tax certainty service within 10 working days of receiving this email to make representations.

If you disagree with HMRC’s view, you will still be able to take a contrary position in a tax return at a future date, however an enquiry should be anticipated.