A7.202 Overview of the rules
DOTAS requires certain persons, usually promoters of schemes, but also users in certain circumstances, to provide HMRC with information about schemes falling within certain descriptions, known as 'hallmarks'. The promoter must explain how the scheme is intended to work and must normally do so within five days of making the scheme available to clients. Promoters are likely to be accountants, solicitors, banks and financial institutions and specialist tax avoidance firms, sometimes referred to as 'tax boutiques'. Schemes developed offshore, if not disclosed by the promoter, must be disclosed by the user.
A scheme reference number (SRN) system enables HMRC to identify the users of schemes. When a scheme is disclosed, HMRC allocate a SRN and notify it to the promoter. The promoter must pass the SRN to their clients who in turn must use it to identify themselves to HMRC, normally by including the SRN on a tax return (see A7.233, A7.234).
To a person knowledgeable about UK tax, being provided with an SRN should be an immediate indication that the arrangements may well be challenged by HMRC, and that other consequences under the accelerated payment notices regime may well arise. Promoters of schemes who do not include a strong health warning when marketing anti-avoidance schemes may be found to have been negligent. It should be noted that HMRC regularly provide details of SRNs which have been 'withdrawn' — and which are no longer required to be reported, see A7.233. As at September 2015 just under 50