In a consultation document published alongside the Spring Statement, the government set out its plans for a new service to give major investment projects increased tax certainty in advance. ICAEW’s Tax Faculty provided a summary of the key points in an earlier article.  

ICAEW has welcomed the additional certainty that advance clearance facilities could provide in ICAEW REP 41/25. However, ICAEW believes that restricting the service to businesses big enough to carry out large scale infrastructure projects could reinforce the view that the tax system is more favourable to larger businesses. Therefore, ICAEW has recommended that the government considers widening the scope of the service if it proves to be successful. 

Additionally, ICAEW has warned the government against having HMRC charge businesses to use the new service. ICAEW believes that this could create the perception that larger businesses are at an advantage because they are more likely to have the funds available to pay any fees charged.  

ICAEW has recommended that:

• HMRC commits to providing clearances within a set timeframe and via a named contact.
• Ideally, the clearance process should take the form of a dialogue between the business/agent and HMRC, rather than a written application and written response. Key points could be recorded in written correspondence.
• Other factors should be considered in determining eligibility of a project for the service based on the national or strategic importance of the project to the UK, including:
  • the number of jobs created;
  • the impact on other UK businesses; and
  • whether it helps to further other government objectives beyond economic growth;
• The service acts as a co-ordinating facility to ensure that all tax clearances being sought in relation to a single project are issued, as far as possible, at the same time.
• Businesses can continue to touch base with HMRC as a project progresses to check whether any material changes to facts and circumstances affect the validity of the clearance previously given and where necessary, obtain an updated clearance.