aim key cog flag clipboard-pencil podium flare signal lamp pie-chart graph scale2 hammer2 balance traffic-lights road archery wall share2 warning notification-circle circle-minus prohibited book book2 bookmark

Call your nearest office

Or ask us a question

Search our site

What are you looking for?

share

The net widens

Hot on the heels of HMRC’s proposed “requirement to correct” comes a further proposal “a requirement to notify”.

Businesses, agents, advisers or any other person creating an offshore “arrangement” (not yet defined) for a UK taxpayer that exhibits certain “specified characteristics” (not yet defined) will be required to notify HMRC of the creation of the “arrangement” and any UK taxpayer using it.

 

Who is caught?

The primary responsibility to notify lies with the creator of the “arrangement”. HMRC’s view is that the proposed legislation would apply to creators within and without the UK.

Should the creator fail to notify the burden would move to any promoter or marketer of the “arrangement”.

Should the creator and the promoter/marketer fail to notify then responsibility to do so falls on the participator using the “arrangement”. The net is very wide.

What’s in the net?

The details have yet to be finalised but HMRC are likely to expect the notification net to include:

  • Details of all involved in the “arrangement”
  • Which “specific characteristics” the “arrangement” exhibits
  • Details of the transactions and their nature, eg loans
  • The purpose of the “arrangement” and how that purpose is achieved

But isn’t the net duplicated?

HMRC are of the view the proposal is similar to DOTAS requirements; responsibility cascading to others if failure to notify occurs with those with primary responsibility.

However, HMRC are also of the view the proposal is fundamentally different to DOTAS. DOTAS requires a UK tax advantage to be obtained. In contrast, the proposals are targeted at tax evasion.

Sanctions

HMRC consider that creators and promoters/marketers who fail to comply should face civil sanctions, such as a penalty, for that failure. HMRC are also considering other options, such as public naming.

In addition, to the specific sanctions applying to notification, if HMRC form the view evasion has occurred they could initiate action under the new criminal sanction of facilitating tax evasion.

Old or new “arrangements”?

Both.

HMRC believe it would seriously undermine the proposals effectiveness if it didn’t apply equally to existing “arrangements” as it would to new ones.

The net is therefore very wide.

If you wish to discuss a matter involving the requirement to notify , please contact me at amaxfield@hwca.com or Paul at pmalin@hwca.com.

 

If you cannot find the information you need on our website, please contact Andy Maxfield using our contact form or email directly to amaxfield@hwca.com

Be the first to comment

Get in touch

Whatever issue or question you have, we’ve got the answer.
If you want to get in
touch then please complete our form.

Birmingham

Sterling House
71 Francis Road
Edgbaston
Birmingham
B16 8SP

Leeds

Sterling House
1 Sheepscar Court
Meanwood Road
Leeds
LS7 2BB

London

New Derwent House
69 – 73 Theobalds Road
London
WC1X 8TA

Our addresses

Birmingham

Sterling House
71 Francis Road
Edgbaston
Birmingham
B16 8SP

Tel: 0121 456 1613

Leeds

Sterling House
1 Sheepscar Court
Meanwood Road
Leeds
LS7 2BB

Tel: 0113 3981100

London

New Derwent House
69 – 73 Theobalds Road
London
WC1X 8TA

Tel: 0207 025 4650