HMRC and Seeking a Tax Clearance as an Insurance

• HMRC published on 17/Nov/15 an update to their “Seeking clearance or approval for a transaction”. While pre-transaction discussions with HMRC can be helpful no guarantee can really be offered one way or the other.
• As HMRC say “[they] will not give either formal or informal clearances that the GAAR [general anti-abuse rule] doesn’t apply. HMRC has always made it clear that no assurances about the tax treatment of a transaction will be given in any situation where, in HMRC’s view, the arrangements constitute tax avoidance.”
• So even after the fullest clearance discussions HMRC may change their minds or claim supposedly relevant facts were not revealed to them.
• Accordingly an approach for a taxpayer is to treat clearance discussions almost as an insurance in case of a later dispute. An opportunity to show that matters were put to HMRC beforehand.Of course any such discussions need to be fully documented and evidenced.

Eamon McNicholas
Tax Barrister, Accountant

About Eamon McNicholas

Tax Barrister, Accountant
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