Guidance on the non-statutory clearance service offered by HM Revenue and Customs for all customers and their advisers.
Before using HM Revenue and Customs (HMRC) clearance service you should have first:
- checked that your transaction isn’t covered by a more appropriate clearance or approval route
- considered HMRC’s guidance to see if this answers your question
Further guidance is available on all clearance and approval routes.
When HMRC will provide advice under this service
You can ask HMRC for further guidance or advice if you:
- have fully considered the relevant guidance and/or contacted the relevant helpline
- have not been able to find the information you need
- remain uncertain about HMRC’s interpretation of tax legislation
HMRC will then set out their advice in writing.
When HMRC will not provide advice under this service
If you ask for advice and HMRC doesn’t provide it, they will tell you why. For example:
- you haven’t provided all the necessary information - see the checklists at Annex A, B, C, D or E for details of what you need to provide
- HMRC doesn’t think that there are genuine points of uncertainty - they will explain why they think this and direct you to the relevant online guidance
- you’re asking HMRC to give tax planning advice, or to ‘approve’ tax planning products or arrangements
- your application is about treatment of transactions which, in HMRC’s view, are for the purposes of avoiding tax
- HMRC is checking your tax position for the period in question, in which case you’ll need to contact the officer dealing with the check
- any related return for the period in question is final (except if you’re making a clearance application in connection with an offshore disclosure being made via HMRC’s Digital Disclosure Service)
- there’s a statutory clearance applicable to your transaction
- HMRC won’t give clearances or advice in respect of the application of the ‘settlements legislation’ in Chapter 5 Part 5 Income Tax (Trading and Other Income) Act 2005 or the tax consequences of executing non-charitable trust deeds or settlements
What information you need to provide
To help you decide what information is relevant to your application when you write to HMRC you should use the checklist at:
- Annex A for all transactions other than Business Investment Relief, Business Property Relief and VAT (see below) - please head your letter ‘Clearance service’
- Annex B for advance assurance on Business Investment Relief for non-domiciled persons taxed on the remittance basis - please head your letter ‘Advance Assurance for Business Investment Relief’
- Annex C for Inheritance Tax Business Property Relief clearances
- Annex D for VAT clearances
- Annex E for post transaction clearances connected to an offshore disclosure
HMRC asks for this information to make sure that they understand the background to your request and where your uncertainty lies. This helps to process your application more quickly.
When you write to HMRC you must be satisfied that the information you give is, to the best of your knowledge and belief, accurate and correct.
Where you should send your application
If your application is in relation to an offshore disclosure, you should send it to the address shown in Annex E.
If you have a customer relationship manager or are already in contact with an HMRC clearance team, please send your application directly to them.
In all other cases, you should send your application to the appropriate address in Annex A, B, C or D.
When HMRC will reply
HMRC will usually reply within 28 days. But where difficult or complicated issues are involved it may take longer to reply. If this is the case, HMRC will acknowledge your request and tell you when you can expect a full reply. Due to current demand, the usual 28 day response time for VAT non-statutory clearance requests is not being met. Replies to clearance requests are currently taking approximately 8 weeks to process.
Sometimes HMRC may need to ask you to provide more information before they can send you a full reply. If so, they will suspend the handling time for your application until you’re able to provide them with the additional information that they have requested. HMRC may wish to contact you by telephone for clarification, so it helps if you can provide a day time contact number.
Time limits, interest and penalties
HMRC’s advice doesn’t affect the date by which you have to pay your tax or send in returns. You may have to pay interest and late payment penalties on any tax that you pay late, for whatever reason.
If you’ve asked for advice after a transaction has taken place, but not received this by the time your return (or for Business Property Relief clearances - an Inheritance Tax account) is due to be submitted, then you should still send your completed return in on time. If you send HMRC your return on time you won’t be liable to penalties for failing to make a return. When you receive HMRC’s response you can, if necessary, amend your tax return as long as you’re within the normal time limits to do so.
If you’re seeking advance assurance that a proposed investment will meet the requirements of Business Investment Relief, the time limit within which qualifying investment needs to be made remains unaffected.
If you disagree with HMRC’s view of your transaction and complete your return and pay tax in accordance with your own view of the proper tax treatment, then you may not have paid the right amount of tax at the right time. In such circumstances, if your return contains a careless or deliberate error which results in a loss of tax or an inflated claim to repayment of tax, then you may be liable to interest and penalties.
When you can rely on information or advice provided by HMRC
Provided the information you have supplied is accurate and complete, and you carry out the proposed transactions exactly as you describe them, you will generally be able to rely on HMRC’s advice.
What you can do if you disagree
HMRC aims to give you a clear reply to your questions; they recognise that sometimes you may not agree with what they say, or you may not be happy with the service they have provided.
If you disagree with HMRC’s advice you may complete your return in accordance with your own view of the proper tax treatment, but you should draw HMRC’s attention to the particular entry in your return and explain what you have done.
If you believe that HMRC has failed to take account of some of the material facts set out in your request, please contact the officer who dealt with your application (their details will be on the letter HMRC sent you), explain what facts you feel were overlooked and ask them to look at your request again. If you remain unhappy you can ask for the request to be referred to another officer.
If you’re unhappy with the way HMRC has handled your request, please tell the person or office you have been dealing with. If they’re unable to resolve the issue, ask for your case to be referred to the complaints manager.
Whether you can appeal
There’s no general right of appeal against advice expressed by HMRC, except where rights to appeal are set out in statute. Rather, appeal rights are usually against decisions HMRC take, such as issuing an assessment for underpaid tax or a penalty.
However, some VAT related decisions are classed as ‘appealable decisions’ by statute. The letter HMRC sends you will explain whether you’re able to appeal and tell you what to do if you disagree with a VAT decision.