Commentary

A7.301B Promoters of tax avoidance schemes—stop notices

Administration and compliance

A7.301B Promoters of tax avoidance schemes—stop notices

A7.301B Promoters of tax avoidance schemes—stop notices

HMRC has the power to stop 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. For the key definitions, see A7.301A.

This article discusses stop notices, introduced with effect from 10 June 20211, which require a person to stop promoting a specified tax avoidance scheme. This facility was introduced by HMRC to stop promoters from selling schemes that HMRC suspects do not work. The aim is to reduce the number of clients buying into such schemes, reducing the risk of taxpayers continuing to use a scheme for multiple tax years, potentially ending up with large tax bills if the scheme is ultimately found not to work2.

A stop notice can also be given to a partnership. See A7.313.

Stop notices

If HMRC issues a 'stop notice' to a person (see the conditions below), that person must3:

  1.  

    •     immediately stop promoting the arrangements/proposed arrangements specified in the notice

  2.  

    •     if they control or have significant influence over a person that is a body corporate or partnership, they must pass on a copy of the stop notice to that person within five days and provide details of that person to HMRC within 15 days. That person is also subject to the stop notice and must undertake

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