It was announced in the 2007 Pre-Budget report that improved procedures for clearances would be made available to all businesses, with effect from 1 April 2008. HMRC have produced a guidance note on the revised clearance process.
Obtaining a clearance is often advisable when a transaction’s tax consequences are ambiguous or debatable. When a clearance application is sought, HMRC have stated that they aim to give a decision within 28 calendar days, although in complex cases this may take longer.
Whilst it is unwise to let the tax tail wag the dog, the new procedure allows smaller businesses to obtain a degree of certainty, regarding the tax effects of transactions, which was not available hitherto.
The guidance note can be found here.
For taxpayers not covered by the new procedure, Code of Practice 10 will remain in place.