Anti-avoidance ― introduction ― pre-1 January 2018

Produced by Tolley
Anti-avoidance ― introduction ― pre-1 January 2018

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Anti-avoidance ― introduction ― pre-1 January 2018
  • What is VAT avoidance?
  • Notifying HMRC
  • Party to a scheme
  • Conditions
  • Who needs to disclose a VAT avoidance scheme
  • Time limits to notify HMRC
  • HMRC address
  • Connected persons
  • Features of a scheme
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note provides an overview of how a business, or its adviser, is required to notify HMRC if it enters into a VAT avoidance scheme. Anti avoidance ― listed schemes, Anti-avoidance ― hallmark schemes and Anti-avoidance ― analysis of relevant case law guidance notes.

Please note that HMRC has replaced the legislation contained in VATA 1994, s 58A and Sch 11A with a new Schedule that extends the disclosure regime to the majority of indirect taxes with effect from 1 January 2018. Further details on the changes can be found in the Disclosure of tax avoidance schemes for VAT and other indirect taxes (DASVOIT) - introduction guidance note.

What is VAT avoidance?

HMRC views VAT avoidance as any arrangement or transaction that a party enters into that is intended to give it, or another party, a VAT advantage when compared to another course of action.

It should be noted that businesses are entitled to structure their tax affairs so they can obtain a VAT advantage providing their actions cannot be viewed as being dishonest. However, HMRC does need to be notified if the businesses decides to structure theirs tax affairs in order to obtain a tax advantage as HMRC may decide to challenge the use of the scheme and take steps to prevent the business from continuing to use the scheme.

Businesses should also be aware that HMRC can impose a penalty if the business does not notify it of any schemes that are implemented where the provisions outlined below apply.


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