Main anti-avoidance measures

Tax avoidance schemes

Users of tax schemes that fall within the DOTAS regime or are counteracted under the general anti-abuse rule (GAAR) will have to make upfront payment of any disputed tax. HMRC will be able to issue a notice to the user of a tax avoidance scheme that they should settle their dispute with HMRC when the claimed tax effect has been defeated in other litigation. Failure to do so will risk a penalty and a requirement to pay the tax in dispute.

The government will consult on the DOTAS regime, including refining the existing hallmarks, introducing new hallmarks and strengthening the penalties for non-disclosure. HMRC will be given new powers to tackle non-cooperative promoters of tax avoidance schemes, backed by large financial penalties.

The government is consulting further on measures to deter the use of charities established for tax avoidance purposes.

Dual contracts

High-earning non-domiciled individuals will be prevented from avoiding tax by artificially dividing the duties of one employment between the UK and overseas. There will be no tax on either dual contracts that are not motivated by tax avoidance or on directors who have less than a 5% shareholding in their employer.

Direct recovery of debts

HMRC’s powers to recover tax and tax credits directly from debtors’ bank and building society accounts, including ISAs, will be modernised and strengthened. Implementation will be subject to consultation.

Self-service time to pay

A new online system will enable people in financial difficulty to set up a payment plan for self-assessed income tax.

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ICAEW The Chartered Institute of Taxation ACCA IPG IR