For 2005/06, HMRC estimated that mass-marketed tax avoidance schemes sold to individuals cost the UK £1.5bn. Although this has reduced significantly since then (to £500m based on latest estimates), the government believes that further action is needed to enable HMRC to tackle the 20 to 30 currently active promoter organisations.   

In Closing in on promoters of marketed tax avoidance, the government is seeking views on a range of measures, including: 

• strengthening and expanding the disclosure of tax avoidance scheme (DOTAS) rules;
• introducing new stop and information notices; and 
• taking action against legal professionals involved in promoting schemes.  

It is also asking for feedback on HMRC’s efforts to discourage individuals from using avoidance schemes, including HMRC’s Don’t get caught out campaign. HMRC estimates that, for 2022/23, approximately 36,000 individuals were using an avoidance scheme.   

This consultation will close on 18 June 2025. If you have any feedback that you would like ICAEW to consider for inclusion in its response, please contact Lindsey Wicks by Monday 19 May 2025.   

Strengthening and expanding DOTAS 

The purpose of DOTAS is to provide HMRC with information about tax avoidance arrangements earlier in the process.  

To strengthen and expand DOTAS, the government plans to: 

• Introduce a new hallmark to more closely target disguised remuneration schemes. HMRC believes that such schemes should be disclosed under DOTAS as they are generally caught by other hallmarks. However, the introduction of a new hallmark would “explicitly catch” the schemes. 
• Create a new criminal offence for failure to notify arrangements under DOTAS. The new strict liability offence would be committed where a person fails to notify arrangements under DOTAS without a reasonable excuse, regardless of the effectiveness of the arrangements. It would carry a maximum sentence of an unlimited fine and up to two years in prison. 
• Update the civil penalty regime. Currently, most DOTAS penalties are imposed by the tax tribunal. The government intends to allow HMRC to determine the penalties directly, with the promoter having the right to appeal to the tribunal. HMRC believes that this will speed up the process and bring it into line with other anti-avoidance legislation. 

Introducing new stop notices 

The government intends to introduce: 

• A universal stop notice (USN). The USN would require all persons to stop promoting or enabling schemes which are the same as, or similar to the scheme included in the notice. HMRC believes that the USN would help it to tackle delaying tactics used by promoters, including ‘phoenixing’ (where a promoter carries out the same activities successively through a series of companies which become insolvent). 
• A promoter action notice (PAN). This would require businesses to stop providing products or services to a suspected promoter or persons connected to them. Examples of relevant businesses include banks and other providers of financial services, employment agencies and advertising businesses, including social media businesses.  

The government welcomes views on appropriate sanctions for failing to comply with a USN or a PAN and has outlined a number of safeguards relating to the use of USNs and PANs, including the right to appeal to the tax tribunal. 

Stronger information powers 

The government intends to introduce the following to make it easier for HMRC to identify the individuals behind the promotion of tax avoidance schemes: 

• A connected parties information notice (CPIN). Supported by strong sanctions, the CPIN would compel persons suspected of being connected with the promotion of schemes to provide information and documents to HMRC.
• A promoter financial institution notice (PFIN). Based on the existing financial information notice (FIN), the PFIN would allow HMRC to obtain access to the promoters’ financial or banking data held by financial institutions without the need to seek approval from the tribunal.  

Targeted action against legal professionals 

The government says that a small number of legal professionals are involved, or provide advice that supports promoters, in designing and promoting schemes. To allow HMRC to take “targeted action” against those legal professionals, and promoters, the government will:  

• extend HMRC’s powers to publish the details of legal professionals who promote schemes by making changes to the DOTAS legislation and to HMRC’s main publishing power (s86, Finance Act 2022); 
• introduce a deemed waiver of legal professional privilege (LPP) in certain circumstances where promoters market their schemes on the basis that they have been endorsed by a legal professional;
• engage with regulators and professional bodies in the legal sector so they have the information to help them enforce their standards for members; and
• make clearer HMRC’s position when LPP does not apply with a view to “limiting the circumstances where promoters will attempt to withhold information from HMRC”. 

Further action 

The government says that it intends to build on the measures outlined above to ensure it “remains on the front foot, rooting out and closing down further avenues for promoting avoidance”. Therefore, it will continue to explore further changes to:  

• ensure that non-compliant promoters face significant consequences;
• provide HMRC with the tools needed to act quickly and decisively; and
• fully optimise advances in technology.