Marketed Tax Avoidance Schemes

Xeinadin Group



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The old adage that there are only two certainties – death and taxes – is still relevant. It has always been accepted that it is quite legitimate to preserve your life and to reduce your tax burden by legitimate means.

Tax Avoidance has always been acceptable but tax evasion is the criminal avoidance of tax and that is certainly not recommended.

However, in recent times, H M Revenue & Customs (HMR&C)has been taking a much stricter line with people who are trying to reduce their tax bills by using Tax Avoidance Schemes. To say that they have moved the goal posts does not over-state the position and extreme caution needs to be exercised when considering any Tax Avoidance Scheme that is being marketed. The exploitation of loopholes seems no longer to be acceptable and the hair-shirt-wearing antics of TV personalities who have actually committed no offence are strengthening the H M Revenue & Customs stance.

Several years ago a system was introduced requiring the Disclosure of Tax Avoidance Schemes, commonly referred to as DOTAS. More resources are being deployed to gather information about these schemes and HMR&C are issuing challenges as soon as payments through such a Scheme have been entered on personal Self Assessment Tax Returns.

HMR&C is looking at revising and extending the criteria for Disclosures under the DOTAS regime, and are introducing measures to improve the information available to HMR&C.

Different options being considered include:-

· extending the amount of information to be reported under the DOTAS scheme

· ensuring that persons required to disclose a scheme do so at the right time

· reviewing the revision or extension of the DOTAS “hallmarks” (the descriptions of schemes required to be disclosed for Income Tax, Capital Gains Tax, Corporation Tax, National Insurance Contributions, Stamp Duty Land Tax and Inheritance Tax) and whether these are currently too widely or too narrowly drawn

· Their impacts upon compliance costs and administrative burdens

Draft legislation may be imminent.

To receive an initial free overview of your position in relation to a Scheme, whether you have used one, are considering using one, or you are a provider of a Scheme that may need to be notified to HMR&C under the DOTAS arrangements, please contact one of our HMR&C trained team either by phone, fax, or e-mail as follows:

Telephone: 0151 285 3100
Fax: 0151 285 3131
e-mail: [email protected]