Serial tax avoidance (STAR) ― indirect taxes

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

  • Serial tax avoidance (STAR) ― indirect taxes
  • Background
  • What are classified as indirect tax avoidance schemes?
  • Definitions
  • The indirect tax conditions
  • Time of use
  • Taxpayer emendations
  • What is defeating a tax avoidance scheme?
  • Warning notice
  • Sanctions
  • Groups of companies, partnerships and associates

This guidance note provides details of HMRC’s guidance on the ‘serial tax avoidance regime’ (STAR) and the warning notices that can be issued to businesses where HMRC has successfully defeated the scheme being used. HMRC has produced detailed guidance which can be accessed via Serial Tax Avoidance Regime (STAR) .

Background

The measure explained below will impact businesses that have implemented a tax avoidance scheme or where a tax avoidance scheme has been used by one of the following:

  • •a partnership that the person is a member of
  • •a company that is within the person’s group of companies
  • •an associated person

FA 2016, s 159, Sch 18; De Voil Indirect Tax Service V5.360G (subscription sensitive)

The legislation was introduced with effect from 15 September 2016 and is designed to deter businesses from using tax avoidance schemes.

It is important to note that the STAR legislation does not only apply to persistent offenders and it is equally applicable to persons who have only used one avoidance scheme that was defeated. It impacts all new avoidance arrangements that were entered into on or after 15 September 2017.

Indirect taxes covered by the serial tax avoidance legislation

The legislation covers the following taxes:

  • •value added tax (VAT)
  • •indirect taxes including:
    • ◦aggregates levy
    • ◦air passenger duty
    • ◦bingo duty
    • ◦climate change levy
    • ◦customs duty
    • ◦duties on beer, cider wines (including made-wine) and spirits
    • ◦gaming duty
    • ◦general betting duty
    • ◦hydrocarbon oils duty
    • ◦insurance premium tax
    • ◦landfill tax
    • ◦lottery duty
    • ◦machine games duty
    • ◦pool betting duty

More on Anti-avoidance:
Anti-avoidance ― listed schemes ― pre-1 January 2018
Disclosure of tax avoidance schemes for VAT and other indirect taxes (DASVOIT) ― introduction
DASVOIT ― penalties and powers
Anti-avoidance ― hallmark schemes ― pre-1 January 2018
DASVOIT ― notifiable arrangements and making the notification
DASVOIT ― the hallmarks
Anti-avoidance ― introduction ― pre-1 January 2018
Anti-voidance - specific provisions
Anti-avoidance - analysis of relevant case law
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