Disclosure of NIC and tax avoidance schemes
New legislation came into force on 1 January 2011 affecting the disclosure of NIC avoidance schemes (DOTAS).
The new legislation is designed to ensure that the changes and new penalties in relation to tax avoidance schemes apply equally to schemes involving national insurance contributions (NICs). Whilst most national insurance avoidance schemes also involve income tax some do not.
This change is part of the Government’s package of measures to introduce new penalties for failure to comply with the rules for the disclosure of tax avoidance schemes (DOTAS).
This piece of legislation is necessary to apply the rules to arrangements (or proposals for arrangements) intended to avoid national insurance contributions and to ensure that the related tax and national insurance rules remain in harmony. This also means that promoters and users of schemes only have to deal with a single set of rules at any one time.