The disclosure of tax avoidance schemes (DOTAS) guidance, which helps you to ascertain whether you need to tell HMRC that you use or promote a tax avoidance scheme, has been updated to include a section on how to determine an apprenticeship levy scheme and what to do when you receive a scheme reference number.
The guidance informs you about what to do if you promote or use arrangements that will or are intended to provide the user with a tax or National Insurance contribution (NIC) advantage when compared to adopting a different course of action. It includes advice on:
deciding if arrangements relating to the apprenticeship levy, as well as income tax, corporation tax, capital gains tax, NICs, Stamp Duty Land Tax, Annual Tax on Enveloped Dwellings and inheritance tax (IHT) should be disclosed to HMRC how to make a disclosure the systems HMRC expects users of tax arrangements to have in place to monitor for arrangements that they, rather than the promoter, may need to disclose to HMRC how to notify HMRC that you are using a disclosed arrangement.In conjunction with the updated guidance, HMRC has also updated its disclosure of tax avoidance schemes guidance with information about new disclosure requirements for the Apprenticeship Levy, HMRC contact details, information on how to send reports and what employers and promoters each must do if they are given an Scheme Reference Number.
Under DOTAS certain people must provide information to HMRC about avoidance schemes within five days of the schemes being made available or implemented. Usually the person providing the information will be the promoter of the scheme – the person who designs or markets the scheme. But you must still notify HMRC if you’re a user of a scheme.
The legislation imposes a number of tests to determine if disclosure is required. Briefly these are:
Are there arrangements which are expected to provide a tax advantage? Is getting a tax advantage expected to be one of the main benefits? Does the scheme fall within one of a number of descriptions, called ‘hallmarks’?There are eight hallmarks aimed at new and innovative schemes, marketed schemes and targeting specific schemes, for example, loss schemes. Some or all of these hallmarks apply in relation to:
income tax corporation tax capital gains tax NICs IHT Apprenticeship Levy.The guidance also offers further information on employers’ obligations.
