A7.301A Promoters of tax avoidance schemes—key definitions
HMRC has the power to prevent persons promoting certain arrangements that may give rise to a tax advantage. HMRC can also require such persons to maintain certain conduct and monitor them if they fail to do so. This is known as the promoters of tax avoidance scheme (POTAS) regime. For an overview of the regime, see A7.301.
This article discusses the key terms for the regime:
• relevant proposals and arrangements
• tax advantage
It is not possible to provide a single definition of 'client' as whether a person is a 'client' is measured over different time periods, depending on the context.
Carrying on a business as a promoter
A person carrying on a business in the course of which the person is, or has been, a 'promoter' in relation to a 'relevant proposal' or 'relevant arrangements' (see below) is deemed for the POTAS rules to be carrying on a business as a promoter1. A person is also treated as carrying on a business as a promoter if the person is a 'member of a promotion structure' (see below), irrespective of whether that person carries on a business2. Therefore, people who do not consider themselves to be promoters, may in fact fall into this definition and be caught by the POTAS regime.
There are slightly different definitions of 'promoter' depending on whether the person promotes 'relevant proposals' or 'relevant arrangements' (see below).
A person is a 'promoter' in respect of a 'relevant proposal' if