Serial tax avoidance (STAR) ― indirect taxes

Produced by Tolley

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

  • Serial tax avoidance (STAR) ― indirect taxes
  • Background
  • Indirect taxes covered by the serial tax avoidance legislation
  • What are classified as indirect tax avoidance schemes?
  • Implementing an avoidance arrangement
  • Definitions
  • VAT advantage
  • Non-deductible VAT
  • Disclosable VAT and other indirect tax arrangements
  • Failure to notify
  • 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 details of HMRC’s guidance on the ‘serial tax avoidance regime’ (STAR) and the warning notices that can be issued to businesses where HMRC has successfully defeated the scheme being used. HMRC has produced detailed guidance which can be accessed via Serial Tax Avoidance Regime (STAR).


The measure explained below will impact businesses that have implemented a tax avoidance scheme or where a tax avoidance scheme has been used by one of the following:

  1. a partnership that the person is a member of

  2. a company that is within the person’s group of companies

  3. an associated person

FA 2016, s 159, Sch 18; De Voil Indirect Tax Service V5.360G

The legislation was introduced with effect from 15 September 2016 and is designed to deter businesses from using tax avoidance schemes.

It is important to note that the STAR legislation does not only apply to persistent offenders and it is equally applicable to persons who have only used one avoidance scheme that was defeated. It impacts all new avoidance arrangements that were entered into on or after 15 September 2017.

Indirect taxes covered by the serial tax avoidance legislation

The legislation covers the following taxes:

  1. value added tax (VAT)

  2. indirect taxes including:

    1. aggregates levy

    2. air passenger duty

    3. bingo duty

    4. climate change levy

    5. customs duty

    6. duties on beer, cider wines (including made-wine) and spirits

    7. gaming duty

    8. general betting duty

    9. hydrocarbon oils duty

    10. insurance premium tax

    11. landfill tax

    12. lottery duty

    13. machine games duty

    14. pool betting duty

    15. remote gaming duty

    16. soft drinks industry levy

    17. tobacco products duty


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