A7.224 DOTAS hallmarks—employment income provided through third parties
The disclosure of tax avoidance scheme (DOTAS) rules require 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 person must tell HMRC how the scheme is intended to work, usually within five days of the date the scheme is made available to any person.1
For an overview of the DOTAS regime, see A7.202.
This article discusses the employment income provided through third parties hallmark. For an overview of the hallmarks and lists that show which hallmarks must be considered in different situations, see A7.215.
Application of this hallmark
This DOTAS hallmark prescribes 'arrangements' that seek to avoid the disguised remuneration rules (ie employment income provided through third parties)2. For the definition of 'arrangements', see A7.205.
This hallmark applies where the arrangements provide a tax advantage relating to income tax, corporation tax, capital gains tax or national insurance contributions irrespective of whether a promoter is involved3. See A7.215.
Although theoretically schemes involving any of these taxes are within this hallmark, in reality the hallmark is most likely to apply where the tax advantage concerns income tax and/or national insurance contributions.
This hallmark must be considered by the following persons when deciding whether the arrangements are notifiable for the purposes of a disclosure under DOTAS:
• the promoter of the arrangements (see A7.210), or
• the user of the arrangements, where they are required to make the disclosure because:
– there is