There were 30 disclosures in the latest round compared with about 45 in the same period of the previous year. The current figure comprises 17 in the “Main Regime” for income tax, corporation tax and capital gains tax; seven in National Insurance (NI) and six in Stamp Duty Land Tax (SDLT).
The breakdown in 2012 was 27 (Main), less than five (NI), less than five (Inheritance Tax) and eight (SDLT). In the period October 2012 to March 2013 the figure was about 47, which broke down as 32 (Main), less than five (NI) and 10 (SDLT).
The disclosure scheme was begun in 2004 and in the early years the number of disclosures would be in the hundreds every six months.
Frank Strachan, tax partner at Edwin Coe, said he was not surprised by the decline in disclosures: “When we meet new clients who have previously used a tax scheme,we hear the same story of disappointment.
"I think taxpayers are now far more aware that these schemes carry significant risk, which can lead to endless legislation and serious cashflow problems. I believe that HMRC has got the message across, that tax avoidance schemes are not worth the risk."
According to HMRC, tax avoidance represents a significant part of the UK tax gap. It involves using the tax law to obtain a tax advantage that Parliament never intended. It frequently involves contrived, artificial transactions that serve no purpose other than to reduce tax liability. And it enables some taxpayers to gain an unfair advantage, undermining confidence in the tax system.
HMRC’s anti-avoidance strategy has three core elements: preventing avoidance at the outset where possible; detecting it early where it persists and countering it effectively by challenge by HMRC.
The Disclosure of Tax Avoidance Schemes (DOTAS) regime is a key component of the detection strategy of the HMRC. It enables it to get early information on the schemes and how they work which is then used to inform legislation; getting information about who has used the scheme which informs HMRC’s response, reduce the supply of avoidance schemes and deter promoters and users from using such schemes.
The regime works by requiring a promoter and sometimes users to provide information to HMRC about schemes falling within certain descriptions (known as hallmarks), which might be expected to provide a tax advantage.
