HMRC are looking to clear more than 60,000 cases involving tax avoidance schemes, by using the following new rules.
DOTAS (The Disclosure of Tax Avoidance Schemes), if you’re involved in tax avoidance, you must supply information about the scheme to HM Revenue & Customs (HMRC). This helps HMRC to:
- get early information about schemes and how they’re claimed to work
- find out quickly who has used a scheme
If you don’t tell HMRC about a scheme that must be disclosed you could be liable to a penalty – this would have been included on your tax return.
Follower Notices (FN)
HMRC believe promoters can delay litigation so taxpayers benefit from deferral of the tax liability. The FN provisions enable HMRC to counteract this cash-flow advantage. HMRC will issue a notice to taxpayers where they believe the scheme is ineffective as a result of a decision from court or tribunal.
Taxpayers receiving a FN have 90 days to amend their return or make representations to HMRC, or face a financial penalty. There does not appear to be any substantive right of appeal.
Advanced Payment (AP)
The AP rules require taxpayers who participated in arrangements caught by the Disclosure of Tax Avoidance Schemes (DOTAS) regime, or being challenged under the General Anti-Abuse Rule (GAAR), to pay the tax pending the outcome of that dispute.
These measures are not limited to new arrangements – those who have already used schemes with DOTAS references may be required to make an AP to HMRC. This could have implications for anyone with existing planning arrangements in place.
These changes potentially affect a large number of individuals with historic tax planning arrangements such as Employee Benefit Trusts, Employer Funded Retirement Benefit Schemes, Partnership loss schemes and Contractor Loan Schemes.
Whilst many companies and individuals have used DOTAS schemes to avoid paying tax, many of you will have to pay this back and are now looking for legitimate non-disclosable tax avoidance schemes, such as CAPITAL ALLOWANCES. If you own commercial properties you can be assured that you wont have to pay tax back if use us!
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