Major projects advance clearance

Lack of certainty over the tax treatment of major projects can deter businesses from committing to investments and existing processes can be inadequate for the most complex and innovative projects.

Therefore, to support their plan for economic growth, the Government confirmed that a dedicated service to provide statutory certainty over how tax rules will be applied to a project will be launched in July 2026.

The service will be reviewed after one year to assess improvements and consider possible threshold changes.
 

What will the clearance process be?

It is envisaged that the process will involve the following steps:

• An optional early engagement discussion with HMRC
• Written clearance submission
• Scoping meeting between the taxpayer and HMRC within 30 days of submission
• Clearance consideration by HMRC within a further 30 days, unless otherwise agreed
• Issuance of clearance

 

Who will be eligible to use the clearance?

It is proposed that the service will be available to corporate entities that are liable for UK corporation tax, or that will be liable for corporation tax due to the planned project.

This will need to be carefully defined, especially because it is envisaged that this service will be available for those intending to bring inward investment into the UK from overseas.

For example, an overseas parent of an infrastructure group may evaluate a potential project in the UK, but the UK-resident project vehicle may not be formed unless or until the project proceeds. In these circumstances, the service should be available to the overseas group parent.
 

Will there be a project size threshold?

The Advance Tax Certainty service will be targeted at the largest investment projects with the largest impact on economic growth, and will ensure that HMRC has capacity to deal with the clearance requests submitted. Projects will be eligible if they are investing at least £1 billion in the UK over the lifetime of the project. The amount of investment includes all project expenditure incurred in the UK, less financing costs and expenditure on the acquisition of shares or ownership interests in other businesses or entities.
 

What taxes will the clearance cover?

The Advance Tax Certainty clearance will cover Corporation Tax, VAT, Stamp Taxes, PAYE, and the Construction Industry Scheme. It will exclude transfer pricing, valuation of assets, hypothetical scenarios or purpose tests.
 

Will the clearance decision be binding?

Clearances will bind the Government to its interpretation of the law, but not if there is a change in case law and/ or a change in legislation. The clearances will typically be issued for an initial period of up to five years.

Although HMRC will not offer clearances on anti-avoidance issues such as the Unallowable Purpose test for corporate interest deductions, it is understood that it may offer a view as to whether there is a low risk of a future compliance intervention. HMRC will issue guidance in relation to this.
 

Publishing clearances

Clearances issued by the new Advance Tax Certainty service will not be published.
 

How we can help

Please contact Marios Gregori, National Head of Construction & Infrastructure, if you require any assistance in this area.