Disclosure of tax avoidance schemes (DOTAS) ― overview

Introduction

Over many years, successive Governments have introduced measures to curb what they have seen as being unacceptable tax avoidance. This is different to tax evasion, where sums or sources of income or gains are concealed or omitted from a taxpayer’s returns. Avoidance is where the taxpayer uses the way in which tax law, or a combination of tax laws, works to achieve a tax advantage, such as minimising or delaying tax bills (or maximising or accelerating a tax repayment), otherwise than where the legislation in question was introduced with the aim of delivering that tax advantage.

In addition to the inclusion of numerous specific anti-avoidance provisions designed to stop identified avoidance schemes, the UK tax code includes several wider anti-avoidance tools:

1. •

   the regime for disclosure of tax avoidance schemes (DOTAS) ― aimed at providing HMRC with early intelligence about avoidance

2. •

   the general anti-abuse rule (GAAR) ― aimed at counteracting any tax advantage delivered by avoidance not caught by more specific measures (see the General anti-abuse rule (UK GAAR) guidance note)

3. •

   accelerated tax payments ― this can be used to require the taxpayer to pay the disputed tax or national insurance up-front, so that the cash flow advantage during the enquiry/litigation rests with HMRC (see below)

4. •

   the regime for promoters of tax avoidance schemes (POTAS) ― aimed at changing the behaviour of agents who offer high-risk avoidance schemes to their clients (see Simon’s Taxes A7.301)

5. •

   the regime for serial tax