A7.306 Promoters of tax avoidance schemes—defeats
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 considers the meaning of a relevant defeat for the purposes of the issue of a defeat notice or a conduct notice to a promoter, see A7.302–A7.305.
With effect from 15 September 2016, the POTAS regime was amended to allow HMRC to issue a defeat notice and potentially a conduct notice to persons 'carrying on a business as a promoter' (see A7.301A) whose tax avoidance schemes are regularly defeated in the courts1.
The definition of 'relevant defeat' is complicated because it is not always the actual scheme marketed by the promoter that is defeated, but one that is similar in structure. Therefore, it relies on a number of definitions of arrangements2:
• relevant arrangements—broadly, this means that the tax advantage that is to arise as a result is the main benefit, or one of the main benefits, of the arrangements (see A7.301A for full details)3
• promoted arrangements—these are 'relevant arrangements' in relation to which a person is or has been a promoter (see A7.301A for the definition of promoter)4
• related arrangements—one set of arrangements are 'related' to another set
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