Figures show drop in tax avoidance schemes
Recently published figures by HMRC show a steep decline in the number of reported tax avoidance schemes under the Disclosure of Tax Avoidance Schemes (DOTAS) legislation.
According to HMRC’s statistics only 17 direct tax schemes were reported in the six months to 30th September 2013 (see below), the smallest number since registration of schemes by promoters became compulsory in 2004.
More than a third of direct tax arrangements came to an end in the period September 2012 – September 2013.
| Year | Financial* | Employment* |
|---|---|---|
| 01.08.04 – 31.03.05 |
340 | 163 |
| Y/E 31.03.06 | 94 | 28 |
| Y/E 31.03.07 | 29 | 7 |
| Y/E 31.03.08 | 2 | 0 |
| Y/E 31.03.09 | 0 | 0 |
| Y/E 31.03.10 | 0 | 0 |
| Y/E 31.03.11 | 0 | 0 |
| Y/E 31.03.12 | 0 | 0 |
| Y/E 31.03.13 | 0 | 0 |
| 01.04.13 – 31.09.13 | 0 | 0 |
| Year | Main Regime* | NIC* | IHT* | SDLT* | VAT Listed** | VAT Hallmark** |
|---|---|---|---|---|---|---|
| 01.08.04 – 31.03.05 | 0 | 0 | 0 | 0 | 341 | 339 |
| Y/E 31.03.06 | 0 | 0 | 0 | 485 | 47 | 44 |
| Y/E 31.03.07 | 125 | 0 | 0 | 185 | 40 | 25 |
| Y/E 31.03.08 | 205 | 23 | 0 | 70 | 24 | 5 |
| Y/E 31.03.09 | 102 | > 5 | 0 | 28 | 10 | 6 |
| Y/E 31.03.10 | 116 | 6 | 0 | 61 | 7 | 5 |
| Y/E 31.03.11 | 97 | 11 | 0 | 21 | 8 | 5 |
| Y/E 31.03.12 | 116 | 17 | > 5 | 13 | > 5 | > 5 |
| Y/E 31.03.13 | 59 | 7 | > 5 | 18 | > 5 | 5 |
| 01.04.13 – 31.09.13 | 17 | 7 | 0 | 6 | > 5 | > 5 |
* direct tax
** indirect tax
Note – from 1st August 2006 the ‘financial’ and ’employment’ categories were replaced by hallmark schemes.
The DOTAS regime was implemented so as to allow HMRC to keep abreast of the different types of avoidance scheme in circulation and affords the Revenue the opportunity to review and, where necessary, legislate to block any scheme that is considered aggressive or simply not fair.
These latest figures would appear to show that HMRC are succeeding in their fight against tax avoidance and that promoters are becoming dissuaded in devising new tax avoidance schemes.
The reason there is a drop in DOTAS is because if you fully declare a Tax Avoidance Scheme the government will change the law retrospectively, demand money and bankrupt you. See S58 FA 2008/BN66. Those that didnt declare the same arrangement have got off Scott free (it is actually very questionable if you actually needed to but those that did thought they were doing the right thing).
Yeah, rule of law is important after all, and is what differentiates us from tinpot dictatorships!
As if. 🙁