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HMRC internal manual

Non-statutory Clearance Guidance

When a clearance has been dealt with: interest and penalties

It is made clear in the external application guidance that where a customer has applied for a clearance, but has not received it by the time that their return is due to be submitted, the return must still be sent in before the time limit.

The return should be completed according to the customer’s own view of the correct tax treatment of the particular transaction. The normal amendment provisions will apply to Self Assessment Returns, with it open to the customer to amend their return on receipt of the clearance, subject to the normal time limits.

Normal interest and penalty rules will apply if a return is incorrect, whether or not the transactions have been the subject of a clearance.

Where a customer disagrees with a clearance provided and completes their return in accordance with their own view of the proper tax treatment, then it may turn out that the business has not declared or paid enough tax at the right time.

Regardless of whether the business has applied for a post transaction clearance or whether we had given a clearance by the due date, any unpaid or undeclared tax carries interest in the normal way. Similarly, any overpaid tax carries repayment interest from the date it was paid wherever this is usually the case.