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Revenue and Customs Brief 41/07

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HM Revenue and Customs -Tax Authorities

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Issued 1 June 2007

Background

At Budget 2007, HMRC announced that it would take forward the proposals in the Review of Links with Large Business review (PDF 217K) (published in November 2006). The second proposal was:

“The extension of existing clearances so that as normal business practice, HMRC will provide businesses with their view of the tax consequences of significant commercial issues whenever there is uncertainty.”

Code of Practice 10, the guidance on clearances, says that where there is genuine uncertainty about the meaning of the law HMRC will advise upon their interpretation of legislation passed in the last four Finance Acts. The proposal from the Review of Links with Large Business means that, by Budget 2008, regardless of when legislation was enacted, HMRC will provide advice on the tax consequences of genuine significant commercial issues.

Also announced at Budget 2007, was that during 2007/08, there would an early extension of clearance work where there is genuine uncertainty regarding the interpretation of tax legislation (without time limit) in two particular areas of tax law:

* Stamp duty land tax from Royal Assent of Finance Act 2007; and

* Substantial Shareholding Exemption from 01 June 2007

Substantial Shareholdings Exemption (Schedule 7AC TCGA 1992)

Tax Bulletin 84 issued on the 25th August 2006, explained that with effect from the granting of Royal Assent to Finance Act 2006 (19th July 2006) the Code of Practice 10 (Information and Advice) facility was no longer available for the purpose of the Substantial Shareholding Exemption. However, following the announcement at Budget 2007, the facility will be reinstated from 1 June 2007.

The SSE pilot will test a new way of working within HMRC. In order to ensure improved consistency for businesses seeking clearances, a structure has been put in place to channel Code of Practice 10 applications relating to the Substantial Shareholdings Exemption through a small number of specifically trained individuals in Local Compliance or through Client Relationship Managers in the appropriate sector of the Large Business Service. Businesses, and their Practitioners, whose tax affairs are not normally handled by the Large Business Service should in the first instance send applications to the HMRC Officer who would normally deal with their tax affairs. For those companies whose tax affairs are handled by a CRM in the LBS, they should submit applications to that CRM as normal.

To assist HMRC in providing a prompt service, COP10 applications should be marked on the envelope and on the covering letter with Compliance – Code of Practice 10 application – Substantial Shareholding Exemption. There is more information about circumstances in which HMRC offers the clearance service in Code of Practice 10.


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© Crown Copyright 2007.

A licence is need to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are updated regularly and may be out of date at time of reading.



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Article Published/Sorted/Amended on Scopulus 2007-06-01 20:51:18 in Tax Articles

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