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<p>A key part of HM Revenue & Customs’ (HMRC) strategy in tackling promoters of
disguised remuneration and other tax avoidance schemes is to change their behaviour
so that they stop this activity altogether.</p><p> </p><p>HMRC have a range of legislative
powers to tackle promoters, under three main regimes: Disclosure of Tax Avoidance
Schemes (DOTAS), Promoters of Tax Avoidance Schemes (POTAS), and the Enablers penalty.
Penalties can be charged for various failures to comply with the requirements of these
regimes. HMRC’s Counter-Avoidance directorate, created in 2013, is responsible for
applying these penalties in cases of marketed tax avoidance.</p><p> </p><p>Fewer than
five penalties have been charged under DOTAS by the Counter-Avoidance team since 2013.
Before then a further 11 penalties were charged for more historic DOTAS failings.</p><p>
</p><p>In addition, there are four litigation decisions received since 2017, all in
relation to disguised remuneration (DR) avoidance arrangements, which confirmed HMRC’s
view that the schemes are notifiable under the DOTAS regime. Penalty action is being
considered in each case.</p><p> </p><p>No penalties have to date been issued under
the POTAS or Enablers legislation. These regimes have had a positive impact in changing
the behaviour of some promoters. As a result of HMRC’s concerted action under these
regimes, a number of major promoters have now cooperated with HMRC and have either
stopped selling schemes or ceased business altogether.</p>
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