A7.301 Promoters of tax avoidance schemes—overview
For the latest New Developments, see ND.1940.
With effect from 17 July 2014, legislation has targeted1 certain promoters of tax avoidance schemes, also referred to as 'high risk promoters', whom HMRC considers constitute a higher than average risk, usually on the basis that they fail to comply with their duties under the direct tax and indirect tax disclosure of tax avoidance schemes regimes, either through failure to comply with those rules or failure to respond to HMRC information notices. The promoters of tax avoidance schemes rules are also referred to as 'POTAS'.
The legislation is strict and complex, and has been expanded over time.
Overview of the POTAS regime
Generally, these rules apply to 'promoters' of certain arrangements that may give rise to a 'tax advantage'.
The definition of 'promoter' was widened by FA 2021 to prevent promoters from abusing business structures to avoid their obligations under the POTAS regime by including any person who is a 'member of a promotion structure', whether or not the person carries on a business2.
The POTAS regime may also apply to 'intermediaries' of the promoter3.
For a detailed discussion of the key definitions, including 'promoter', 'intermediary' and 'tax advantage', see A7.301A.
Under the POTAS regime, HMRC can issue:
• stop notices
• conduct notices
• defeat notices
• monitoring notices
These are discussed below.
Often promoters go to great lengths