The preparation of a robust Tax Clearance Application (TCA) is about more than working a through a checklist or recycling stock phrases. In our experience, successful TCAs feature a really strong, authentic explanation of the commercial rationale for the proposed transactions and have the grain of full disclosure running through them.
After all, the objective of the most familiar TCAs is to secure HMRC’s agreement that obtaining a tax advantage isn’t the main purpose, or one of the main purposes, of the transactions contemplated.
Whilst good quality presentation won’t guarantee acceptance (or indeed acceptance without query), it should help the reviewer to process the TCA more quickly. Fast turnaround is often a necessity in the context of major commercial transactions, especially where there is third party involvement.
It’s also wise not to underestimate the fall out created by failed TCAs, which is guaranteed to delay the transaction timetable and in some unfortunate cases will be sufficient to kill off the deal.
The overall message is quite simple – invest the time and effort needed to prepare a robust TCA and don’t be wary of seeking external assistance if you are not experienced in this area.