Introduction
Before using HMRC clearance service you should:
- check that your transaction is not covered by a more appropriate clearance or approval route
- read HMRC’s guidance about all clearance and approval routes to see if this answers your question
When HMRC will give advice under this service
You can ask HMRC for further guidance or advice if you:
- have fully read the relevant guidance or contacted the relevant helpline
- have not been able to find the information you need
- are uncertain about HMRC’s interpretation of tax legislation
HMRC will then give you written advice.
When HMRC will not give advice under this service
If you ask for advice and HMRC does not give it, we will tell you why. This could be because:
- you’ve not given all the necessary information – see the checklists at Annex A, B, C, D or E for details of what you need to give
- HMRC does not think that there are genuine points of uncertainty – we will explain why we 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 with HMRC’s Digital Disclosure Service)
- there’s a statutory clearance applicable to your transaction
HMRC will not give:
- a clearance on matters of fact, such as if certain activities constitute a business
- 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
- clearances relating to the venture capital schemes (Parts 5 to 6 of Income Tax Act 2007)
Information you need to give
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 – head your letter ‘Clearance service’
- Annex B for advance assurance on Business Investment Relief for non-domiciled persons taxed on the remittance basis – 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 ask for this information to make sure that we understand the background to your request and where your uncertainty lies. This helps to process your application quicker.
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
Due to the situation with coronavirus (COVID-19) we are currently unable to deal with applications made by post.
You should submit your application using the email address provided in the relevant Annex.
If you need to disclose sensitive information, and have concerns about sending sensitive information by email, send a short email:
- without any sensitive data
- with details of how we can contact you
Someone will get back to you as soon as possible to arrange an alternative.
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. VAT non-statutory clearance requests are currently taking around 12 weeks to process.
Sometimes HMRC may need to ask you to give more information before we can send you a full reply. If so, we will suspend the handling time for your application until you’re able to give them with the additional information that we’ve requested.
HMRC may wish to contact you by telephone for clarification, so it helps if you can give a daytime contact number.
If you want to get in touch with HMRC to follow up your clearance application, you can either:
Time limits, interest and penalties
HMRC’s advice does not affect the date which you have to pay your tax or send in returns by. 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 will not 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 line 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 these 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 given by HMRC
As long as the information you’ve supplied is accurate and complete, and you carry out the proposed transactions exactly as you describe them, you will 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 and recognise that sometimes you may not agree with what we say, or you may not be happy with the service we’ve given.
If you disagree with HMRC’s advice you may complete your return in line 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’ve done.
If you believe that HMRC has failed to take account of some of the reasons you set out in your request, 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 are 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, tell the person or office you’ve been dealing with. If we’re unable to resolve the issue, you can complain about HMRC.
If you can appeal
There’s no general right of appeal against advice given by HMRC, except where rights to appeal are set out in statute.
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 if you’re able to appeal and tell you what to do if you disagree with a VAT decision.
