HMRC published draft guidance on its advance tax certainty service, detailing eligibility, process, and scope for major UK investment projects.

RF Report

UK’s HM Revenue & Customs (HMRC) published draft guidance on 10 December 2025 setting out the framework for the advance tax certainty service, due to formally launch in July 2026. The guidance reflects the position during the first year of the policy and is subject to change in line with the parliamentary process of the Finance Bill 2025 to 2026.

The guidance outlines eligibility, scope, process, and governance for the service, which HMRC says is part of the government’s commitment to boosting long-term economic growth and supporting confident investment decisions.

Overview of the advance tax certainty service

The advance tax certainty service is part of the government’s commitment to boosting long-term economic growth in the UK and generating certainty for taxes administered by HMRC.

It is a dedicated service for major investment projects. It provides a clear position on how HMRC will apply tax legislation to a project. This service builds on existing support offered by HMRC that provides certainty across a broad range of investments.

HMRC wants this to be a collaborative and transparent service that:

  • delivers tax certainty efficiently
  • supports confident investment decisions
  • provides certainty on complex tax issues is a focused process
  • relies on active engagement from HMRC, yourself, and your advisors

Before you apply, you should make sure you have the resources and availability to work at pace and in partnership with HMRC. They anticipate an approach built on regular conversation, open sharing of information, and responsiveness to requests. Without this level of engagement, it will be difficult to achieve the policy objectives and provide certainty within the desired timeframes.

A clearance produced as part of the advance tax certainty service provides HMRC’s view of how the tax rules apply upfront in writing. They aim to provide a 90-day turnaround from formal submission to providing clearance. This will depend on the complexity of the case and be subject to discussion and agreement with you. The process will typically follow the steps:

  1. Before submitting a formal clearance request, you can request an early engagement discussion with HMRC to set out your proposal. This will allow you and HMRC to check if clearance is likely before committing resources to the process.
  2. You may submit a clearance request in writing to HMRC, with a clear technical analysis of the position and including any supporting information. HMRC will triage applications to check eligibility, scope and any critical timing considerations before acceptance into the process.
  3. Within 21 working days of submission, if you’re successful, HMRC will discuss and agree the deliverable scope and timeline as part of a scoping and planning meeting. You can speak directly with the advance tax certainty service team, subject matter experts, and caseworkers in further detail beyond the initial written submission.
  4. HMRC specialists will then consider the relevant facts and technical analysis, seeking clarification or further information from you if needed. They will agree a timeline for completion of the clearance after the scoping meeting, identifying the key milestones.
  5. HMRC aims to issue you with a clearance within 31 working days of the planning and scoping meeting, if you’re successful. This may vary depending on the complexity or availability of information. This document will set out the scope and duration of clearance, the key facts on which the clearance relies, and key assumptions for continued reliance on the clearance.

Eligibility and Scope

Who can apply for a clearance

A qualifying person may apply for a clearance. This can be the person who is incurring the project expenditure or a person who controls it. In most cases, a qualifying person will be a company.

Where no single person has overall control (such as in the case of a joint venture (JV)), or there are multiple interested parties (such as a consortium), one qualifying person may apply on behalf of the qualifying persons.

Both UK and non-UK resident entities investing in the UK may apply.

If the investment entity does not yet exist, a qualifying person who will control it can apply. The clearance would be binding in relation to the entity or entities named as incurring the project expenditure, and not the applicant.

Financial threshold for entry to the process

The threshold for entry is GBP 1 billion of qualifying project expenditure in the UK over the lifetime of the project. This amount would be reflected in a corporate business plan or authorised project spend. It should not have already been included in a tax return.

HMRC wants to be practical and align with how businesses normally work when checking if you meet the threshold. To keep the service high quality during its first phase, HMRC defines a ‘project’ for threshold purposes as either:

  • one standalone project
  • a group of approved, very similar projects that share the same tax uncertainty

Where only phase 1 is authorised, in recognition of the stage-gated nature of very large projects, the projected cost of subsequent phases could be taken into account.

HMRC aims to work with business as the service becomes more established. It will refine the scope of project to better accommodate businesses’ approach to project boundaries and planning.

Qualifying project expenditure is all UK expenditure on the project except for the exclusions set out in this guidance. That means spending on goods and services that are used or consumed in the UK or the UK continental shelf. This includes the acquisition of tangible assets, like plant and machinery, and intangible assets, like software.

The amounts invested should be easily identifiable as being ‘located’ in the UK, such as being an investment in an asset located in the UK, or staff located in the UK.

For example, on a project to build a power station in the UK, engineering services provided by a person not located in the UK should be clearly for the project in scope rather than your existing operations.

The investment project must also be a new initiative involving significant investment, with significant being determined by reference to the GBP 1 billion financial threshold.

Financing costs will not be included within qualifying expenditure.

The qualifying expenditure should exclude amounts which are used for investment in equity. This is to prevent transactions which may just be an acquisition of existing UK assets rather than genuine investments which create new assets (for example, transactions which are solely mergers and acquisitions, as well as share buybacks).

It must not be an ongoing, ordinary part of business activity but a new investment. This is to make sure the project meets the objective of facilitating new investment in the UK.

Which taxes are in scope of a clearance

Where they are material to the investment project, HMRC will offer clearances on the following areas:

  • Corporation Tax
  • VAT
  • Stamp Duty Land Tax
  • Income Tax
  • PAYE regulations
  • Construction Industry Scheme

Who is excluded from applying for clearance

If you have committed fraud under statute or common law, you are excluded.

Examples of when you are excluded from the process include, but are not limited to, when you have:

  • committed the common law offence of cheating the public revenue
  • committed an offence under the law consisting of being knowingly concerned in the fraudulent evasion of tax
  • been recently liable to a penalty under Section 69C of the VAT Act 1994, or Section 25 of the Finance Act 2003
  • received a deliberate penalty under Schedule 24 of the Finance Act 2007 or Schedule 41 of the Finance Act 2008
  • entered into or carried out arrangements that are abusive under the meaning given in Section 207 of the Finance Act 2013, or where adjustments have been made under Section 209 of the same act
  • incurred a defeat in respect of notifiable tax arrangements under Schedule 17 of the Finance (No.2) Act 2017 (DASVOIT) or Part 7 of the Finance Act 2004 (DOTAS)
  • admitted to deliberate underpayment of tax under Code of Practice 8 or Code of Practice 9 proceedings
  • reached agreement with a prosecutor under a Deferred Prosecution Agreement

This also includes when you are under the special measures regime (Finance Act 2016)

If you’ve had certain penalties, you cannot use this clearance service for at least 5 years. This applies if you:

  • received a deliberate penalty
  • received a deliberate and concealed penalty
  • received any of the penalties listed in the bullet points in section 2.4

The 5-year period starts from the date you entered the special measures’ regime or received the penalty.

This list is not exhaustive.

Where HMRC will not offer a clearance

As will be set out in a statutory notice, HMRC will not offer clearances on the following, including, but not limited to:

  • subject matters outside HMRC functions but relevant to tax (such as the accounting treatment of a given transaction)
  • taxes where administration and compliance are fully devolved (such as Land Transaction Tax (Wales), or Land and Buildings Transactions Tax (Scotland), and business rates)
  • areas where HMRC is reliant on another tax authority for a part or whole of an answer (such as cross-border transfer pricing)
  • areas that are subject to negotiation with another tax authority (such as matters subject to Mutual Agreement Procedure (MAP))
  • draft legislation which has not yet been passed by Parliament
  • certain transactions which are not material to new investment in the UK economy and do not meet the main policy objective (for example, if you were to bring GBP 1 billion of cash onshore and initiate a share buyback)
  • the valuation of assets
  • areas where there are existing mechanisms to provide certainty (such as treaty interpretation, corporate migration, Advance Pricing Agreements (APA), Advance Thin Capitalisation Agreements (ATCA) or Partial Exemption Special Method (PESM))
  • transactions that are speculative or not under serious consideration by you
  • application of the General Anti-Avoidance Rule (GAAR)
  • the treatment of transactions which, in HMRC’s view, are for the purposes of avoiding tax
  • where an existing statutory clearance is applicable to the transaction
  • either the application of the ‘settlements legislation’ in chapter 5, part 5, of the Income Tax (Trading and Other Income) Act 2005 or tax consequences of executing non-charitable trust deeds or settlements
  • the venture capital schemes (parts 5 to 6 of the Income Tax Act 2007)

HMRC will also not offer clearances on the following:

  • anti-avoidance provisions which usually have the heading, ‘anti-avoidance provision’, ‘targeted anti-avoidance rule’ or simply ‘anti-avoidance’
  • the application of main purpose or motive tests

HMRC will not provide clearances on:

  • Draft legislation not yet passed by Parliament.
  • Taxes devolved to other authorities (e.g., Land Transaction Tax in Wales, Land and Buildings Transactions Tax in Scotland).
  • Cross-border transfer pricing or matters subject to Mutual Agreement Procedure (MAP).
  • Valuation of assets, speculative transactions, or share buybacks.
  • Anti-avoidance provisions, GAAR, or motive tests.
  • Transactions already covered by statutory clearance mechanisms such as APA, ATCA, or PESM.

Process and Timelines

  • First year capacity management: HMRC may implement an expression of interest (EOI) and triage process to balance workload. Complexity and immediacy will determine prioritisation.
  • Early engagement meetings: Applicants should request meetings within 10 working days of contact to discuss eligibility, scope, feasibility, and timing.
  • Formal clearance applications: Must be submitted in writing to the advance tax certainty service mailbox, including cover letter, technical analysis, supporting information, and project business plan. Applications must be transparent, with full disclosure of facts.
  • Acknowledgement: HMRC will issue an application reference number within 3 working days.
  • Processing: Within 5 working days, HMRC will check eligibility, assign subject matter experts, and establish capacity.
  • Scoping and planning meeting: Held within 21 working days of submission for successful applicants.
  • Clearance issuance: HMRC aims to issue clearance within 31 working days of the scoping meeting.

Earlier, the UK Parliament reviewed the Finance (No. 2) Bill (Bill 342 for 2024–26), which had been introduced to the House of Commons on 4 December 2025.