The consultation period for the latest round of changes to the disclosure of tax avoidance schemes (DOTAS) regime closed last Thursday. The latest instalment proposes some significant revisions to the hallmarks which determine whether or not a particular scheme falls within the scope of the rules. Those proposals which include the removal of grandfathering from the standardised tax product hallmark and possibly the addition of a new financial product hallmark threaten significantly to extend the scope of the regime.
When the DOTAS regime was introduced in FA 2004 its main aim was to act as an early warning system for HMRC allowing HMRC time to assess the risks that particular schemes may pose and to inform the drafting of any legislation to counteract them. The scheme reference numbers also allowed HMRC to identify end users for the purposes of compliance work. The increased...
