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  • The Statutory Clearance Procedure – the highlights…

    4 May 2017

    Angela Wood

    I recently attended a tax conference, where one of the speakers was Martin Roberts, Team Leader for HMRC’s Clearance and Counteraction Team.

    As we are often asked by clients about the clearance process, we thought it would be useful to share some of the ‘highlights’ of his presentation.

    The first thing to note is that, as is common these days amongst the various departments of HMRC it appears, the team has recently undergone a ‘rebrand’ and are now entitled the rather catchy ‘Business, Assets and International Policy (BIA)’ team, (formerly the equally as catchy ‘CT, International and Stamps (CITS)’ team). However, aside from the name change, we are assured that it’s business as usual.

    The clearance process

    The clearance team consists of around 10 advisers, led by Martin as team leader.

    In terms of the internal workings of the department; most straightforward applications are dealt with by the advisers, and applications are only passed to the team leader if they are unusual or a query is raised.

    The team currently deals with around 8,000 applications per year, and applications are up 5% on 2016 and 30% over the last 3 years.

    We are often asked by clients how long it will be before we receive a response to a clearance application. The answer is that HMRC have 30 days to respond to a clearance application, although as things stand, Martin informed us that around 90% of clearances are processed within 2 weeks.

    However, it should be noted that the 30 day response time applies at each step of the process, so if HMRC raise a query on the application and further information is provided they then have another 30 days to respond.

    What if clearance is not given?

    Whilst there is no appeals procedure, if clearance is not granted you can ask for the case to be referred to the team leader. Where complete deadlock is reached applications can be submitted to the first tier tribunal for review.

    What happens when a clearance is granted?

    Remember that clearance does not give any guarantees. Just because you receive a clearance, this does not guarantee there will be no enquiry from HMRC further down the line. Advance clearance is just that; if the transaction changes or not all of the facts are available at the time the clearance was granted, then things should be kept under review.

    A word of warning…

    As can be seen, it is important to ensure that clearance applications contain full facts and evidence and are clearly drafted, so as to avoid, wherever possible, enquiries being raised by HMRC, and more fundamentally than that to avoid clearances later being declared void.

    As a final word of warning, Martin ended his presentation by stating that HMRC are actively on the hunt for a ‘nice case’ to take through the courts, where they could have a clearance declared void on the basis that the full facts had not been disclosed at the time of the application.

    Enterprise Tax can help make sure you get your clearance applications ‘right’ and ultimately help protect against you being HMRC’s ‘guinea pig’.

    If you would like any assistance with clearance applications or want to discuss a specific case in more detail, please do get in touch.