Serial tax avoidance legislation was introduced on 15 September 2016 and is designed to deter people from using tax avoidance schemes.
Once HMRC has defeated a tax avoidance scheme that has been used, they will issue a warning notice that will remain in place for 5 years. This period is known as the ‘warning period’. During a warning period the user of the defeated scheme will have to provide HMRC with detailed information about any tax avoidance schemes used during that period.
If the user is already in a warning period HMRC will give another warning notice, and extend the warning period by up to a further 5 years.
If HMRC defeat a tax avoidance scheme that the user has used during a warning period, they may impose certain sanctions. However, sanctions cannot be imposed if the user entered into the scheme before 15 September 2016.
If HMRC defeats a tax avoidance scheme on or after 6 April 2017 and the user entered into that scheme before 15 September 2016, they won’t take that defeat into account for the purposes of the serial tax avoidance legislation as long as the user has done one of the following before 6 April 2017:
fully disclosed details of the scheme to HMRC told HMRC that full disclose of the details of the scheme will be made to HMRC and this is done within the time limit that HMRC has set.Guidance on this subject can be foundhere.
