Disclosure of tax avoidance schemes—VAT and other indirect taxes (DASVOIT)

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Disclosure of tax avoidance schemes—VAT and other indirect taxes (DASVOIT)
  • Why does this matter?
  • Background and commencement
  • Which indirect taxes are within the rules?
  • What creates a requirement to disclose?
  • Arrangements and the main benefit test
  • Meaning of tax advantage in relation to VAT
  • Meaning of tax advantage in relation to other indirect taxes
  • Who must make a disclosure?
  • Who is a promoter?
  • More...

Disclosure of tax avoidance schemes—VAT and other indirect taxes (DASVOIT)

This Practice Note describes the rules on the disclosure of tax avoidance schemes for VAT and other indirect taxes (DASVOIT).

For the rules on disclosing the avoidance of:

  1. income tax, corporation tax, capital gains tax (CGT) and National Insurance contributions (NICs), see Practice Note: Disclosure of tax avoidance schemes—income tax, corporation tax, CGT and NICs

  2. stamp duty land tax (SDLT), see Practice Note: Disclosure of tax avoidance schemes—SDLT

  3. inheritance tax (IHT), see Practice Note: Disclosure of tax avoidance schemes—IHT

Why does this matter?

The DASVOIT rules make it obligatory to inform HMRC about certain arrangements for avoiding VAT and other indirect taxes. The rules allow HMRC to find out about tax avoidance schemes that it might otherwise not know about, or might only find out about much later. The rules also mean that HMRC can monitor how widely a known scheme is being used, and if necessary can act swiftly to close it down.

Making a disclosure under DASVOIT has no bearing on whether the arrangements have their intended tax outcome. This means, for instance, that if a scheme is legally effective (from the taxpayer's point of view), HMRC will have to legislate to stop it. Equally, being issued with a reference number by HMRC as a result of making a disclosure does

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