Serial Tax Avoidance

New Serial Tax Avoidance (STA) legislation is now in place. This gives HMRC the power to penalise certain taxpayers engaged in tax avoidance schemes.

HMRC have advised that a taxpayer will not be affected by the STA legislation if they entered into a scheme prior to 15 September 2016 and have not used any since, provided they either:

  • Settle the scheme with HMRC before 6 April 2017; or
  • Make a full disclosure about any schemes they are using before 6 April 2017.

Where a taxpayer does enter into a scheme after 15 September 2016 and is affected by the STA legislation, HMRC will issue a warning notice.

This will stipulate an annual requirement to submit additional information to HMRC and will remain in place for five years. If a taxpayer is involved in further defeated avoidance schemes, additional sanctions will be levied. These include penalties ranging from between 20% and 60% of the tax avoided, public naming as a Serial Tax Avoider and restrictions on access to direct tax reliefs for up to three years.

A link to the HMRC document can be found by clicking here. If you have any queries or concerns, please do not hesitate to contact one of our tax advisersĀ on 01903 234094.