On 31 July 2014 HMRC published a consultation entitled Strengthening the Tax Avoidance Disclosure Regimes, to examine the regimes for direct taxes and for VAT. These regimes were introduced in 2004 to provide early information to HMRC about tax avoidance schemes and their users. The regimes operate by requiring taxpayers or their advisors to inform HMRC about the design and/or use of schemes intended to avoid the taxes covered by the regime  in question.

The consultation seeks views on various proposals to strengthen the regimes, including:

  • draft regulations to introduce a new hallmark to identify schemes involving certain financial products
  • whether the tax product test should be widened to ask not whether obtaining a tax advantage is “the main purpose of the arrangements”, but whether it was “the, or one of the main purposes”
  • amendments to the use of scheme reference numbers, including amendments to the penalties for scheme users who fail to correctly report use of a disclosed scheme Responses to the consultation are sought by 23 October 2014.

To access the consultation document click here