Disclosure Of Tax Avoidance Schemes – update
HMRC have published a summary of their activities related to the strengthening and improvement of the DOTAS regime.
Five new measures were identified in PBR 2009 and, after consultation the necessary legislation was introduced in FA 2010. The five new measures are:
- a new ‘trigger point ‘ for the disclosure of actively marketed schemes – the point at which a promoter first communicates information (including information about the expected tax advantage) about a substantially designed scheme to a third party with a view to obtaining clients for that scheme
- an information power which gives HMRC the power to require a scheme ‘introducer’ (an intermediary whose function is to introduce clients to the promoter) to identify the promoter
- increased penalties for failure to comply with a disclosure obligation
- a new requirement for promoters to provide HMRC with periodic information about clients who implement a notifiable scheme
- revised and extended hallmarks (the descriptions of schemes to be disclosed)
HMRC expect to implement most of the new rules with effect from 1 January 2011. However, some of the hallmarks (descriptions of schemes requiring disclosure) consulted upon will be implemented at a later date in 2011-12.
The objectives of obtaining information from a promoter about clients who have implemented a disclosed scheme are:
- To inform risk assessment, enabling HMRC to prioritise anti-avoidance legislation and resources for compliance work; and
- Identify scheme users who fail to report a scheme reference number (SRN).