Who is the author of the website?
We are a collective of taxpayers formed with the intention to inform about the scandal that is the deeply flawed and unjust DOTAS legislation contained in Finance Bill 2014.
Why should I care about the Finance Bill 2014 ?
The Finance Bill contains measures (DOTAS legislation) that will impact you financially, possibly very heavily, if you have used a tax-efficient scheme at any point in the past 10 years.
If the Government’s proposals become law, HMRC will be able to demand from you retrospective payment of any tax they “believe” you should have paid for these years, without regard for the actual legality of the arrangements, and without possibility of appeal.
More generally, you should care if you care about the Rule of Law.
Is HMRC’s statement that 80% of DOTAS schemes “don’t work” as HMRC wins 80% of court cases agains DOTAS schemes?
A resounding NO! HMRC insist that they win 80% of cases, and base their revenue projections on this figure. What is not being said is that HMRC do win 80% of the cases that they take to court. But HMRC does not take all cases to court – very far from it, actually!
HMRC must abide by strict guidelines before they can litigate: to put it simply, the odds must be vastly in their favor for them to challenge a scheme in court.
Given that HMRC must and does select carefully when to litigate, the 80% success rate is rather meaningless and should not be used to project a false estimate of how much tax the proposed legislation will enable to recover
Is it a moral fault to use a tax-efficient structure?
No. It is a legal right, no different, for example, from obtaining tax relief for pension contributions or ISA savings.
Quoting Lord Clyde (1929) :
“No man in the country is under the smallest obligation, moral or other, so to arrange his
legal relations to his business or property as to enable the Inland Revenue to put the
largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to
take every advantage which is open to it under the Taxing Statutes for the purposes of
depleting the taxpayer’s pocket. And the taxpayer is in like manner entitled to be astute
to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue”
In modern English what he was trying to say was that, providing you operate within the law, you are free to plan and structure your affairs with a view to getting the best possible tax result for you, your family, or your business.
What can I do to prevent these measures from becoming law?
There is little time for action. It is the Government’s intention that they be passed into law with the Finance Bill 2014, in July 2014.
There is a narrow window of opportunity to reach out to parliamentary representatives so that these proposals are amended in order to make them balanced and actually in accordance with the Rule of Law.
If is therefore the responsibility of everyone to reach out to their MPs and beyond in order to alert them on the flaws, breaches of human rights, potential for unintended consequences, damage to the UK ‘s legal system’s credibility that these measures contain.
Many MPs are not aware of the implications of what they will be voting on, particularly the catastrophic impact on the normal, middle-class families that these measures will without a doubt have. The hardworking families this Government is so keen to defend and protect. Therefore every contact can make a difference.
Editing advice is available – if you need help, please do not hesitate to contact us.
Please also check the Finance Commitee page to check whether your MP is on it.
(but note that you should reach out to your MP regardless of his sitting on the committee or not)
How do I contact my MP or Lords?
The easiest way to find who your MP is and their contact details is via the website http://www.writetothem.com/
If at all possible, meeting your MP in person is best.
I stopped using tax efficient schemes years ago. Do I need to worry about these
Yes. Due to the retrospective nature of these measures, you will potentially receive demands for payment for tax years going back as far as 2004.
I have never used a tax-efficient structure. Why should I care?
If you care about Human Rights and the Rule of Law, you should care about the Government’s proposals contained in Finance Bill 2014.
These proposals go against several universally accepted principles of Justice, and are flawed on the following grounds:
● They ignore the Rule of Law, in particular the doctrine of separation of powers.
● They ignore one of the two elements of the rules of natural justice that
no one should be judge in his own cause.
● They go radically against the presumption of innocence until proved guilty (or, in
civil matters, of non-liability until found liable).
The proposals are also in violation of a person’s basic Human Rights, as they will no doubt push many families into hardship and bankruptcy, possibly forcing them to sell their family homes and assets, all of this in the complete absence of any wrongdoing,
before the arrangements used could be examined, and their case heard, in court.
For these reasons, anyone who has trust in the legal system of this country should pay
extremely close attention. If you are not affected by these measures, someone you know will.
What is “DOTAS” ?
DOTAS stands for HMRC’s Disclosure of Tax Avoidance Schemes rules.
The DOTAS regime allows HMRC to keep up to date with what types of tax avoidance schemes are in circulation. This provides the opportunity to review and, if necessary, amend legislation to block any scheme which the government considers aggressive and unfair.
Under DOTAS, a scheme promoter is required to disclose the main elements of the scheme to HMRC. HMRC will then issue the scheme with a DOTAS number (SRN).
A scheme user has to notify HMRC that he is using the scheme by inserting the number in his tax return.
Are all DOTAS schemes the same?
No. Far from it. The coverage of DOTAS is incredibly wide. Any arrangement that, in HMRC’s opinion, enables tax minimization in any way qualifies for DOTAS.
Schemes caught by DOTAS vary from, at one end of the spectrum, highly aggressive
and complex tax minimization schemes used by the very rich. At the other end exist many more conservative tax planning strategies used by average people. Schemes also vary greatly in design and implementation.
Does HMRC consider all DOTAS schemes equal?
From the point of view of the measures included in Finance Bill 2014, yes.
All DOTAS schemes are indiscriminately targeted by the legislation, regardless of design, actual purpose, or robustness. There are no “levels” of DOTAS, and anyone who has declared a DOTAS scheme on their Tax Return and has been honest and transparent will by default become a potential recipient of an accelerated payment notice.
What are “accelerated payment notices” ?
“Accelerated payment notices” are a draconian new power to be granted to HMRC.
These notices will require the recipient to pay tax HMRC believes is due within 90 days (or a
further 30 days if the taxpayer requests that HMRC should reconsider the amount demanded by the payment notice). There is no recourse to appeal beyond this.
A payment notice does not determine liability and has no impact on the underlying question of whether any tax is actually due.
Are “accelerated payment notices” retrospective ?
The Government insists these measures are not retrospective, as HMRC will issue “accelerated payment notices” only to these who have an open enquiry or who have been issued a discovery assessment.
However, it is an indisputible fact that enquiry notices are issued in a quasisystematic
manner to taxpayers who have disclosed a DOTAS registration number on their tax return.
Therefore, If you declared the use of a DOTAS scheme for any given tax year, it is a certainty
that HMRC will open an enquiry into your return for that tax year. In most cases no further action was taken until now!
Under the new rules, it will become legal for HMRC to demand sums they believe are due for past years, even if the DOTAS arrangements were perfectly legal at the time (this aspect of things is not even considered).
This makes the measures retrospective in effect.
The Treasury Committee itself recognizes the retrospective nature of the legislation.
Quoting Stephen Coleclough, president of the Chartered Institute of Taxation (CIOT):
“We are very concerned about HMRC’s proposal to extend the accelerated payment
proposals to existing schemes disclosed under DOTAS. This is in effect introducing
The fact that there has been disclosure indicates an intention to be open and transparent
with HMRC. In a number of cases the disclosure has been made even if the promoter or
taxpayer did not believe it to be strictly necessary ‘to be on the safe side’. To now
introduce a retrospective change of law leading to an accelerated payment of tax is
unreasonable. To extend HMRC’s powers without safeguards to taxpayers who by
definition have been transparent with the tax authority is unjustifiable”
Who will be sent an “accelerated payment notice” ?
HMRC will be able to issue accelerated payment notices to:
● Those in DOTAS arrangements who have an open enquiry or who have been issued a
● Anyone who has taken part in an arrangement to which a counteraction notice has been
issued under the GAAR (General AntiAbuse
● Anyone having received a follower notice (see “What are ‘follower notices’? ” below)
How will HMRC decide who will be sent an “accelerated payment notice” ?
The list of DOTAS schemes the users of which will potentially receive an accelerated payment
notice will be published before Royal Assent in July 2014.
Under what conditions can HMRC send me an “accelerated payment notice” ?
You need to have an open enquiry or undetermined appeal regarding the relevant tax year(s).
I have always disclosed DOTAS and all details of my income to HMRC on my tax
returns. Can they still send me an “accelerated payment notice” ?
Absolutely. Having been entirely transparent with HMRC with regard to DOTAS arrangements in
the past will in fact make you a prime target for an accelerated payment notice.
What will be my obligations upon receipt of an “accelerated payment notice”?
● You must pay the sums demanded under 90 days.
● You will be able to ask HMRC to reconsider the amount of the payment and provide
evidence in support of that request. This will give you a 30 days extension.
● Late payment penalties of up to 15 per cent will be imposed in three successive stages
for delays in paying the tax under dispute.
The Government is referring to “tax under dispute”—I didn’t know I was in a dispute
with HMRC as they merely sent me enquiry notices, and told me I had nothing to do?
Do I have a dispute?
It seems that in the Government’s view, if you have declared participating in a DOTAS scheme at any time and received a notice of enquiry, you have a dispute even
if nothing had been asked of you.
What will happen if I do not pay the amounts demanded in the “accelerated payment
Penalties will apply for late payment of the sum required under the payment notice:
● 5% at the end of the 90 day payment period (or, if later, 30 days after HMRC issue a
determination against any representations)
● 5% five months later
● 5% more six months after that if sums remain unpaid.
Do I have any recourse if I receive an “accelerated payment notice” ?
There exists no independent appeal process in the draft legislation. There is, therefore, no
recourse for you.
Does this not make HMRC Judge, Jury and Executioner ?
As difficult to believe as it might be, it does!
We are to believe the government’s reassurance that HMRC will act in a sensible manner and not abuse their new powers.
What will happen once I have paid?
The payments will be treated as payments on account and in no way determine any liability or conclude the enquiry process. HMRC will hold that tax until the dispute is resolved and the question of liability determined.
What motivation will HMRC have to resolve the dispute after they have the money?Although we are to believe the government’s promise that HMRC will do their utmost to have every case examined in a swift manner, it is difficult to think of a reason why they would actually do that.
What if I, somehow, manage to get my case to court, and am eventually proven right?HMRC will give you back your money with interest.
What are “follower notices”?
A “follower notice” is another type of notice to pay. HMRC will be able to issue a “follower notice” to you if “HMRC is of the opinion that there is a judicial ruling which is relevant” to the arrangements used by you. A judicial ruling includes decisions of any Tribunal or Court, including the First Tier Tribunal (the decisions of which are not binding on other Tribunals as a matter of law), where there is no ongoing appeal.
The privilege to decide whether a judicial ruling is relevant to the arrangements used by you will be given to HMRC.