DOTAS - what is notifiable?

By Tolley
Employment_tax_img2

The following Employment Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • DOTAS - what is notifiable?
  • General
  • Income tax, corporation tax, capital gains tax and NICs
  • Inheritance Tax (IHT)
  • Stamp Duty Land Tax (SDLT)
  • Annual Tax on Enveloped Dwellings (ATED)

General

The DOTAS rules do not include a definition of an avoidance scheme, instead they focus on whether a scheme is ‘notifiable’. A scheme can be something that it is described as such, but the rules apply equally to any arrangements. This guidance note uses the term ‘scheme’ to cover both. A scheme is notifiable if it is expected, or can reasonably be expected, to deliver an advantage in relation to any tax and that advantage is the main benefit (or one of the main benefits) of the scheme, and it also carries certain hallmarks or contains specified features. Those hallmarks or features vary according to the type of tax concerned.

The taxes covered by the DOTAS regime are:

  • income tax
  • corporation tax
  • capital gains tax (CGT)
  • National Insurance Contributions (NICs)
  • inheritance tax (IHT)
  • stamp duty land tax (SDLT)
  • annual tax on enveloped dwellings (ATED)

Full HMRC guidance on DOTAS (running to 162 pages) is available on the GOV.UK website .

A separate disclosure regime applies to value-added tax (VAT) - see the Anti-avoidance - introduction guidance note in the VAT module (subscription sensitive).

Of the taxes outlined below, it is the first group (income tax, corporation tax, capital gains tax and NICs) that is most likely to be of interest to employers.

Income tax, corporation tax, capital gains tax and NICs

For these taxes, there are currently eight hallmarks (although the leasing hallmark does not apply to NICs-only schemes). If one or more of these is present in a scheme where the delivery of a tax or NICs advantage is a main benefit, that scheme is notifiable. It is not at all unusual for a scheme to come

More on Schemes — developments: