ATCS06300 - Governance and legal: 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 GAAP that change how HMRC must view the relevant tax treatment.
See IEIM520100 for information on how advance tax clearances would create a legitimate expectation.
HMRC will only be bound if the customer relies on the position adopted in the clearance and reflects this in their filing position. If the customer takes a different filing position, HMRC are not bound by that aspect of the clearance.
For example, if a customer makes its SDLT return differently than agreed in the clearance, HMRC are not bound by that aspect of the clearance, but that would not unbind HMRC from, say, the VAT aspect of the clearance.
Where a customer files contrary to HMRC’s known position, it should consider whether it is within the scope of the Uncertain tax treatment legislation.
The clearance will be granted to the entity incurring the project expenditure, although a parent entity may apply on their behalf.