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The problem with HMRC clearances

With HMRC increasingly challenging and rescinding clearances, the certainty provided by pre-clearing transactions has faded, write Martin Walker and Mark Bevington (ADE Tax). 

Who doesn’t like a bit of certainty? Tax legislation is often complex or open to different interpretations. Seeking clearance seems a sensible way of obtaining absolute certainty or at least reasonable assurance that HMRC will not look to challenge the tax treatment of the transaction after the event.

However when HMRC seek to rescind clearances and to re-open matters that taxpayers thought had been set in stone clearances quickly start to lose their lustre becoming more of an awkward skeleton in the closet than a pillar of certainty.

Background

Clearances can be either:

  • statutory that is prescribed or even mandated by the legislation; or
  • informal whether through the customer compliance manager (CCM) or to the relevant HMRC...

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