ATCS05700 | Advance Tax Certainty Service: Process: Post-issuance: Case study

Financial modelling for major projects undergoes multiple iterations with increasing levels of detail. This might be simplified to:

1. Cash-flow projections– appraisal of cash-flow forecasts, cost-revenue benefits, scenarios and sensitivities, including tax costs

2. Finance structuring – proposed debt structuring, shareholder returns, ahead of the final investment decision

Cash-flow projections

A clearance may be requested here to give certainty about a particular element of the project where more detail is available.

It is envisaged that a clearance could be issued at this stage with critical assumptions, but would require a more detailed review of those assumptions when a renewal is requested in year 5. The taxpayer could also request to update the clearance once more detailed facts are available.

Finance structuring

A clearance requested at this stage is more likely to be accompanied by the final details of the project, which would be required to secure financing and board approval.

Therefore, when a clearance is requested in year 5 (or indeed year 10, 15 and so on) there would be a less detailed review of the underlying facts and assumptions.