Taxpayers can apply to HMRC for clearance or approval for certain specific transactions. This can help give certainty as to how a proposed transaction will be treated. Of course, there are numerous caveats to seeking clearance and the taxpayer must have provided all relevant facts of the intended transaction.

There are two types of clearance available. A statutory clearance / approval or a non-statutory clearance / approval. Statutory clearance applications can be made to HMRC before the relevant transaction or event has taken place based on the underlying legislation.

The non-statutory clearance service concerns areas of tax where the legislation does not otherwise provide for clearance. Before using this service HMRC requires the taxpayer to check the transaction is not covered by a more appropriate clearance or approval route and to have fully considered relevant HMRC guidance.

HMRC are currently experiencing delays in dealing with applications for VAT non-statutory clearance requests. These requests are currently taking around 12 weeks to process.

HMRC does not provide clearances or advice for the application of the 'settlements legislation' or the tax consequences of executing non-charitable trust deeds or settlements.

Source: New feed