Mark McLaughlin warns that a clearance given by HMRC is not as watertight as some people might think.
Anyone working in tax knows how complex it can be. There are so many ‘grey’ areas of uncertainty. It is sometimes difficult to know whether one’s interpretation of tax law is correct.
HMRC to the rescue?
The law recognises this uncertainty for taxpayers and advisers. Statute provides for applications to HM Revenue and Customs (HMRC) for advance clearance on the tax treatment of certain transactions (i.e. ‘statutory clearances’). HMRC also offers a ‘non-statutory clearances’ service in some other areas of uncertainty.
In either case, a clearance is broadly written confirmation of HMRC’s view on the application of the law to a particular transaction or event, which the taxpayer can