Disclosure of indirect taxes avoidance

The government has laid two sets of regulations setting out the hallmarks and information requirements on promoters for the new disclosure of avoidance schemes regime for VAT and other indirect taxes, coming into force on 1 January 2018.

The Indirect Taxes (Notifiable Arrangements) Regulations, SI 2017/1216, prescribe the hallmark tests for notifiable arrangements under the new rules. Notifiable arrangements in relation to VAT include:

• retail supplies – splitting and value shifting;
• offshore supplies of insurance and finance;
• offshore supplies to relevant business persons outside EU; and
• options to tax – land.

Notifiable arrangements in relation to any indirect tax include:

• confidentiality involving promoters;
• confidentiality involving other persons (not SMEs);
• premium fees; and
• standardised tax products.

The Indirect Taxes (Disclosure of Avoidance Schemes) Regulations, SI 2017/1215, prescribe the information promoters must disclose to HMRC under the new rules. Part 2 of the regulations sets out circumstances in which persons will not be treated as promoters.