Skip to content



Disclosure of tax avoidance schemes


The measure

HMRC has published a consultation document in respect of the Disclosure of Tax Avoidance Schemes (DOTAS). This paper sets out five proposed measures:

  • Enhanced penalties for failure to disclose a scheme;
  • A power to require introducers of clients to a promoter to provide information about that promoter;
  • A change to the time when a promoter must disclose a marketed scheme to HMRC;
  • A requirement for promoters to provide information about users of an arrangement to HMRC; and
  • Revisions and extensions to the 'hallmarks' under which disclosure needs to be made.

The most notable proposed changes is the extension of the 'hallmarks' to include almost any employment tax planning arrangement, or any arrangement that substitutes capital for income. These hallmarks are subject to certain exceptions, which generally relate to statutory reliefs such as approved share option plans. However, HMRC are requesting views as to what further arrangements need to be excluded.

Who will be affected?

The consultation is set to close in February 2010 and the changes are expected to be made in Finance Bill 2010.

When?

In the main, these proposals will affect the promoters of disclosable arrangement.

Our view

Unnecessary disclosure would unlikely to be of any benefit to HMRC and it is therefore important that the regime continues to focus on those arrangements that it is intended to capture.