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Where there is material uncertainty about the tax treatment of a transaction, and the issue is commercially significant, taxpayers can apply to HMRC for its view on the tax consequences. This process is available either before or after a specified transaction. The clearance can cover all business taxes and is in addition to the various statutory clearances available to the taxpayer, which are detailed in the Statutory clearances guidance note.

In order for clearances to be binding, HMRC must have been provided with all the relevant facts and all the relevant issues should have been highlighted in the application. HMRC states that this requirement is to be interpreted broadly and that anything at all which could potentially be relevant should be disclosed.

HMRC aims to provide clearances within 28 days on:

1. •

   areas of material uncertainty arising within four Finance Acts of the introduction of any new legislation

2. •

   legislation older than the last four Finance Acts where there is material uncertainty around the tax outcome of a real issue of commercial significance to the business itself. This is determined