It isn’t always clear when and why you might need to seek HMRC clearance before continuing with a transaction, not least how this might be achieved. To reduce the risk of improper due diligence, if HMRC clearance can be gained, it’s a good idea to apply for it, with this process providing full transparency between you and the authorities, allowing them to view, analyse and confirm your transactions.
No matter if you’re looking for a tax service that will help you navigate the complexities of HMRC or wish to discover more about R&D credits, you’ve arrived at the perfect place. Specialists in accounting, at Williamson and Croft we can help you to optimise your business structure and ongoing cash flow, streamlining your services for continued growth.
To find out how we can help, contact us today and explore our blog below which delves into the details of HMRC clearance.
When do you need to use HMRC clearance?
Crucially, there are two types of HMRC clearance, statutory and non-statutory. Statutory HMRC clearance is required by law before a transaction to make sure it’s compliant with the necessary taxes. Non-statutory clearance, meanwhile, is not legally required and is used to give businesses some financial security before they resume a complex deal or transaction.
Instances of statutory HMRC clearance include:
- When selling shares in a company.
- When going through a demerger of a group of businesses into new companies.
- When inserting a holding company over an existing company – specifically when there is a share for share exchange.
- When a company purchases their own shares in the seeking of capital treatment.
On the other hand, if you want the peace of mind that you won’t experience unexpected tax bills in the future, some businesses will choose to apply for non-statutory HMRC clearance, despite the fact that they aren’t legally necessary. Instances when you might apply for non-statutory HMRC clearance include:
- When carrying out a particularly complex business transaction.
- When working out VAT on imported goods.
- When breaking down the intricacies of inheritance tax.
Why do you need to use HMRC clearance?
Statutory HMRC clearance is required by law to prevent tax avoidance and ensure proper compliance. Meanwhile, while non-statutory HMRC clearance isn’t a legal requirement, some choose to use it to make sure that they’re staying compliant with financial regulations, preventing unexpected tax bills in the future as a result of your lack of due diligence.
How to apply for HMRC clearance
Applying for HMRC clearance starts by sending a request to the authorities. This can be performed on the government website and includes a simple process:
- Preparation of your application – Requiring the necessary supporting documents and a breakdown of your issue and tax reliefs you’re making reference to.
- Send your request – Statutory requests should be sent to reconstructions@hmrc.gov.uk. Meanwhile, if you’re applying for non-statutory clearance, contact nonstatutoryclearanceteam.hmrc@hmrc.gov.uk.
- Wait for a response from HMRC – This usually takes up to 28 days.
How Williamson and Croft can help
Looking for help in regard to how to stay compliant with your taxes? At Williamson and Croft, we can help, with guidance on how to create a comprehensive statutory clearance request to whether you should or shouldn’t submit a non-statutory application. But we can offer you far more than just this.
No matter what industry you’re operating in, we can provide you with financial guidance that will help you to optimise your operations. Need financial guidance for your retail business? Or, how about accounting for your public sector company? Get in touch with Williamson and Croft today to discover exactly what we can do for you.