ATCS02500 - Advance Tax Certainty Service: Eligibility and Scope: Where HMRC won’t offer a clearance
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 a customer were to bring £1bn 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 the customer
- 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/or derivative contracts regimes, on the basis set out in ATCS08000. HMRC will not generally offer a clearance on matters of fact, but will consider such matters on a case-by-case basis.
HMRC will not provide a clearance in the following scenarios:
- where HMRC is actively checking the customer’s tax position for the period to which the application relates (in such cases, the customer 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 ensure the integrity of the process and maintain its focus on genuine, well-supported applications.