Tax Avoidance

(asked on 3rd February 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will take steps to ensure taxpayers are adequately informed of the implications of Disclosure of tax avoidance schemes (DOTAS) registration; and if he will make a statement.


Answered by
Jesse Norman Portrait
Jesse Norman
This question was answered on 11th February 2020

Under the Disclosure of Tax Avoidance Scheme (DOTAS) regime introduced in 2004, promoters of a tax scheme are required to notify HM Revenue and Customs (HMRC) where a scheme contains various hallmarks of tax avoidance. Once notified, HMRC send the promoter a Scheme Reference Number (SRN) to give to any user of the scheme. Users must then include the reference number on their tax return. This helps identify users to HMRC for possible investigation.

Since 2009 promoters have been required to inform their clients that disclosure under DOTAS does not represent approval of the scheme by HMRC. Employers involved in disguised remuneration schemes and promoters are legally obliged to inform their employees and clients via forms AAG7 or AAG6. Both forms AAG6 and AAG7 make it absolutely clear that the recipient is involved in a disclosed tax avoidance scheme, that the scheme is not HMRC approved, and that DOTAS registration means the recipient is likely to be investigated for tax avoidance by HMRC.

Failure to inform clients carries a penalty of £5,000 per failure for promoters, and up to the same amount per employee, for employers.

Further information about forms AAG6 and AAG7 is available at the links below: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/491693/AAG6_10_15.pdf; https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/491713/AAG7_10_15.pdf

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