Non-Statutory Clearance Applications (“NSCA”) are a useful tool in gaining additional certainty from HM Revenue & Customs on certain areas of tax law where the issues are particularly complex, new and/or published guidance incomplete.
HM Revenue & Customs (“HMRC”) will not give a NSCA for any transaction or circumstance where it believes the general anti-abuse rule (“GAAR”) applies, or where it thinks the arrangements constitute tax avoidance.
Excluded Transactions
HMRC will not give:
a clearance on matters of fact, such as if certain activities constitute a business (i.e. it must be on a point of tax law).
clearances or advice in respect of the application of the ‘settlements legislation’ in Chapter 5 Part 5 Income Tax (Trading and Other Income) Act 2005, or the tax consequences of executing non-charitable trust deeds or settlements
clearances relating to the venture capital schemes (Parts 5 to 6 of Income Tax Act 2007).
When HMRC will and will not give a NSCR is periodically updated and last month further details were included for the specialist Venture Capital Reliefs team who are responsible for administrating tax-advantaged venture capital schemes.
Non-Statutory Clearance Applications
The NSCA process is an additional feature of the tax system for areas not covered by the Statutory Clearance or Approval (“SCP”) process; and, HMRC has organised specialist teams to deal with various specific scenarios and subjects. For example, there are specialist teams that are set up to discuss applications around: –
Company migrations
Controlled Foreign Companies
Inward Investment Support service
Creative Industries
EIS, SEIS and Venture Capital Trust (VCT) scheme
To avoid wasting time and effort, before making a general non-statutory clearance application you should remember to check the scenarios covered by the SCP process and key points of contact (including any special information requirements) for specialist NSCA. Making sure your NSCA is received by the right team, in the right format and with the right details is critical for a meaningful and timely response.
Process and Timetable
HMRC will usually reply within 28 days, but where difficult or complicated issues are involved it may take longer to reply. If this is the case, HMRC will acknowledge your request and tell you when you can expect a full reply. VAT non-statutory clearance requests are currently taking around 8 weeks to process.
At Furasta Consulting we have experience of NSCA for complex capital allowances and other real estate tax issues. If you have a question, or would like further details, please do not hesitate to contact us.