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. The proposed transactions must then be carried out exactly as described in the clearance application. HMRC aims to provide clearances within 28 days.

This service is only available in certain circumstances. If there is, for example, a statutory clearance available, that must be used in preference. HMRC lists in its guidance certain situations where it will not provide clearance at all. For instance, if HMRC does not feel there is any genuine area of uncertainty, it will not provide