Corporation Tax Act 2010 section 1092

Advance clearance of payments

Section 1092 provides a mechanism for companies to obtain advance clearance from HMRC that a payment will not be treated as a chargeable payment, provided it meets certain conditions.

• A person intending to make a payment may apply to HMRC for advance clearance, and if HMRC confirm before the payment is made that the conditions are met, the payment is not treated as a chargeable payment.
• The conditions are that the payment is made for genuine commercial reasons and does not form part of a scheme or arrangement whose main purpose, or one of whose main purposes, is the avoidance of tax (including stamp duty and stamp duty land tax).
• A company that becomes connected with, or ceases to be connected with, another company may apply for clearance in respect of any payments it may make after that change in connection, even if there is no present intention to make any payments.
• Where HMRC give clearance on such an application, no payment covered by that clearance will be treated as a chargeable payment merely because the company is or has been connected with the other company.