DOTAS ― what is a notifiable scheme?

Produced by Tolley
DOTAS ― what is a notifiable scheme?

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • DOTAS ― what is a notifiable scheme?
  • General
  • Income tax, corporation tax, capital gains tax and NIC
  • Confidentiality where promoter involved
  • Confidentiality where no promoter involved
  • Premium fee
  • Standardised tax products
  • Loss schemes
  • Leasing arrangements
  • Employment income
  • More...

General

The DOTAS rules do not include a definition of an avoidance scheme, instead they focus on whether a scheme is ‘notifiable’. A scheme can be something that it is described as such, but the rules apply equally to any arrangements. This guidance note uses the term ‘scheme’ to cover both.

A ‘scheme’ is notifiable if it is expected, or can reasonably be expected:

  1. to deliver an advantage in relation to any tax

  2. that advantage is the main benefit or one of the main benefits of the scheme, and

  3. that it carries certain ‘hallmarks’ or contains specified features. Those hallmarks or features vary according to the type of tax concerned

FA 2004, s 306; SI 2006/1543

The taxes covered by the DOTAS regime are:

  1. income tax

  2. corporation tax

  3. capital gains tax (CGT)

  4. national insurance contributions (NIC)

  5. inheritance tax (IHT)

  6. stamp duty land tax (SDLT)

  7. annual tax on enveloped dwellings (ATED)

FA 2004, s 318

Full HMRC guidance on DOTAS (running to 162 pages) is available on the GOV.UK website.

A separate disclosure regime applies to value-added tax (VAT). See the Anti-avoidance ― introduction guidance note in the VAT module.

Note that the DOTAS regime does not apply to the devolved Scottish taxes: land and buildings transaction tax (LBTT) or Scottish landfill tax (SLFT). There is no disclosure regime in respect of these taxes.

This guidance note considers whether a scheme is notifiable in relation to the various taxes. For a summary of the DOTAS regime, see the Disclosure of tax avoidance schemes (DOTAS) ― overview guidance note. For details of the action which end users of the scheme must take, see the DOTAS ― what end users must do guidance note.

Income tax, corporation tax, capital gains tax and NIC

For these taxes, there are currently eight hallmarks (although the leasing hallmark does not apply to NIC-only schemes). If one or more of these is present in a scheme where the delivery of a tax or NIC advantage is a main benefit, that scheme is

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