HMRC's Advance Tax Certainty Service ("ATCS") went live on 1 July 2026. Under the scheme, businesses and public bodies committing at least £1 billion of qualifying expenditure to a UK investment project can apply for a formal, binding clearance from HMRC on how the relevant taxes will apply. That position is obtained before any significant capital is committed.
The taxes in scope are broad: corporation tax, VAT, stamp duty land tax, income tax, PAYE, and the Construction Industry Scheme. A clearance lasts up to five years and can be renewed for a further five. This means the clearance can apply from before the final investment decision is taken up until the relevant tax returns are made. There is no fee, at least for now. Clearances will also remain confidential, which addressed one of the main concerns raised during the earlier consultation.
The ATCS is designed to be used by business undertaking major UK investment projects not only in the private sector, but also public-private partnerships, infrastructure programmes and major procurement frameworks. An agreed tax position will also be helpful to Government bodies structuring a project with a private partner, as it will eliminate any major tax risk.
How does it work?
Before lodging a formal application, investors can request an early engagement meeting with HMRC, a practical sense-check before committing time and resource to a full submission.
Applicants with a history of deliberate tax non-compliance, including DOTAS defeats, deliberate penalty assessments, or settlements under HMRC Code of Practice 8 or 9, are excluded from the service. This point should be checked early.
Once in the process, HMRC targets a 90-day turnaround from formal application to clearance. Both UK and non-UK entities can apply, and where a project involves a consortium or joint venture, a single clearance can cover all participating parties. Clearance is not a one-off exercise. Holders have ongoing obligations, including annual self-monitoring of compliance with clearance conditions and a duty to notify HMRC promptly of any material changes to the project. Failure to meet those obligations risks revocation and can attract penalties.
Points to watch
The £1 billion qualifying expenditure threshold is high, and, as highlighted above, means that the ATCS is only available for major projects. HMRC will review the financial threshold after year one, so it may come down, but for now the service is firmly aimed at the largest projects only.
The more pointed issue concerns what HMRC will actually require to grant a clearance. The question has been raised regarding what standard of certainty HMRC will enforce when deciding whether to grant a clearance but the practical problem goes a step further. Without knowing the answer, an investor cannot sensibly assess whether to commit to the application process at all. A 90-day collaborative exercise requires considerable management time and professional fees. For a project where the tax position is genuinely contested, that commitment only makes sense if there is a realistic prospect of clearance. Right now, there is a limited understanding as to what information HMRC requires to grant the clearance and therefore it will be difficult for investors to determine whether investment in the clearance process is worthwhile. This gap will hopefully be addressed by HMRC as the service matures and we have a better understanding of the factors HMRC will consider.
What's next?
Expressions of interest are open now. If you have a qualifying project in the pipeline, or are advising on one, it is worth engaging HMRC at the earliest opportunity. Should you have any queries arising from the above or require advice in connection with the Advance Tax Certainty Service, please do not hesitate to contact Caroline Colliston, Jon Stevens or James Cashman
Thank you to William McGoldrick for contributing to this article.
