Disclosure of tax avoidance schemes (DOTAS) meaning

FORTHCOMING CHANGES : At Budget 2025, the government announced it will legislate in Finance Bill 2026 (also known as Finance (No 2) Bill 2024–26) to introduce measures targeting promoters or enablers of marketed tax avoidance. These measures are set out in Part 6 of the Bill, as introduced on 4 December 2025, and comprise: updates to the DOTAS and DASVOIT civil penalty regime, enabling HMRC to issue DOTAS penalties directly rather than seeking tribunal approval a general prohibition on promoting marketed arrangements with no realistic prospect of success, and a prohibition on promoting arrangements specified in universal stop regulations (USRs). Breach of either prohibition could result in publication, financial penalties and criminal prosecution promoter action notices (PAN). A PAN would require businesses to stop providing goods or services to promoters of tax avoidance where those goods or services are used in the promotion of avoidance and the promoter is in breach of a USR or stop notice. PANs will primarily be issued to financial...

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Alpha Republic Ltd v HMRC [2023] UKFTT 750 (TC) The substantive appeal in this matter centred on HMRC assigning a scheme reference number under the disclosure of tax avoidance scheme (DOTAS) provisions in respect of arrangements promoted by the company. The company had likewise initiated judicial review proceedings to challenge HMRC’s decision to publish its name and related particulars, though those proceedings were withdrawn shortly before the scheduled hearing. The company then applied for a direction compelling HMRC to serve a fresh statement of case on a number of stated grounds. It contended that the dispute stemmed from legislation described as ‘penal’ and ‘contradictory to fundamental principles of English law’, and therefore should be construed restrictively, with the tribunal, in particular, ensuring that HMRC at all times observed rigorous compliance with the Tribunal...

HMRC v Industria Umbrella Ltd (In liquidation) [2025] UKFTT 494 (TC) HMRC contended that Industria Umbrella promoted contractor loan arrangements intended to allow contractors to obtain the bulk of their gross contract fees as purported loans, with only a modest slice treated as salary processed through PAYE. Under these arrangements, each worker received an employment contract issued at the same time as a loan agreement. The employment terms specified a basic rate roughly aligned with the National Minimum Wage, whilst the loan documentation enabled payment of the balance of the contract value in a form that was not immediately subject to income tax or National Insurance contributions (NICs). The paired documents operated together to channel remuneration as a loan rather than earnings. In substance, the structure was designed to elevate contractors’ net pay to around 80% of the gross contract value by apportioning remuneration in a tax-favoured way. HMRC informed the company that, in the absence of agreement that the arrangements were notifiable under the DOTAS regime, it would...

FORTHCOMING CHANGE: Following the Autumn Budget 2024, the government initiated an independent review into the loan charge. Launched on 23 January 2025, the review’s remit was to examine the obstacles preventing people within scope of the loan charge, who have not settled and paid their tax liabilities in full, from reaching agreement with HMRC, and to recommend measures to encourage settlement with HMRC (see News Analysis: Autumn Budget 2024—Independent review of the loan charge). To support this work, a call for evidence—directed at those still affected by the loan charge and their advisers—was issued on 28 March 2025. The Final Report, together with the government’s response, was released at Budget 2025 on 26 November 2025...

FORTHCOMING CHANGES : At Budget 2025, the government stated it will legislate via Finance Bill 2026 (also known as Finance (No 2) Bill 2024–26) to introduce measures targeting promoters or enablers of marketed tax avoidance. The provisions are set out in Part 6 of the Bill (as introduced on 4 December 2025) and cover: updates to the DOTAS and DASVOIT civil penalty regime so that HMRC can issue DOTAS penalties directly, rather than seeking tribunal approval; a general prohibition on promoting marketed arrangements that have no realistic prospect of success, and a prohibition on promoting arrangements specified in universal stop regulations (USRs). A breach of either prohibition would attract a range of sanctions, including publication, financial penalties and criminal prosecution; promoter action notices (PAN). A PAN would require businesses to cease providing goods or services to promoters of tax avoidance where those goods or services are used in the promotion of avoidance and the promoter is in breach of a USR or stop notice....

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