CLLS Tax Law Committee response to HMRC's consultation on Simplifying Treaty Relief from Withholding Tax on Interest Paid Overseas - September 2026

The response welcomes the consultation as a genuine opportunity to cut administrative cost without losing revenue, and supports moving to self-assessment of treaty relief for interest, while retaining the existing formal clearance process as a parallel option for those who want certainty.

The Committee argues that for many of the large international finance transactions CLLS members see, it would expect not much to change, at least initially. The risk allocation in market-standard contracts such as the Loan Market Association (“LMA”)’s standard documentation is already well understood internationally and processes are established. In this third-party lending context, we would regard reform of the QPP regime to probably be just as fruitful in reducing the burden on HMRC as introducing the treaty self-assessment regime. If the QPP regime were made simpler and more robust in a third-party lending context, increased adoption of QPP should reduce the burden on HMRC of evaluating applications for DTTPs and certified claims for
treaty relief.