DISCLOSURE OF TAX AVOIDANCE SCHEMES

How Disclosure of Tax Avoidance Scheme Work

The DOTAS (Disclosure of Tax Avoidance Schemes) operation provides a way to pre-inform HMRC of your intentions before taking part in a tax avoidance scheme. It enables HMRC to keep track of and assess any schemes that might be considered aggressive or unfair from a legal perspective.

The information gathered through DOTAS (Disclosure of Tax Avoidance Schemes) includes details of how the scheme will be used and the people using it.

Promoters of tax avoidance schemes are required to disclose details about the scheme to HMRC, upon which, if approved, they are issued with a DOTAS number. Any user of this scheme will need to insert the applicable DOTAS number into their tax return.

A DOTAS-approved scheme won’t necessarily stay that way. HMRC will monitor the scheme and, if it is found too aggressive or unfair, will file to have it legally terminated. 

The main taxes all require disclosure under the DOTAS rules, which can be confusing, so it’s always best to consult HMRC’s most recent guidance. You will need to declare your tax arrangements in the following circumstances:

  • If the arrangement will enable a tax advantage to any person
  • If the tax advantage is considered the main benefit of the tax arrangement in question
  • If the tax arrangement falls under the hallmarks put forward in the relevant regulations

Disclosure of Tax Avoidance

The DOTAS operation provides a way to pre-inform HMRC of your intentions before taking part in a tax avoidance scheme. 

promoters of tax avoidance

Tax avoidance schemes aim to assist in the acquisition of tax advantages. These schemes are run by promoters.

ACCELERATED PAYMENT NOTICE

If a user is involved in a tax avoidance scheme, you will likely be subject to investigation. You may receive an APN

The General Anti-Abuse Rule

The General Anti-Abuse Rule, the GAAR, is guidance from the HMRC that forms part of the anti-avoidance framework of the UK.

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