Disclosure of Tax Avoidance Schemes (DOTAS)

Penalties for failure to comply with a DOTAS obligation without reasonable excuse are provided for in section 98C Taxes Management Act 1970, as amended by FA 2010.

DOTAS penalties fall into three categories:

  • Disclosure penalties: apply to failure to disclose a scheme. There are variations in cases where a Tribunal has issued a disclosure order.
  • Information penalties: apply to other failures to comply with DOTAS.
  • User penalties: apply to failure by a scheme user to report a Scheme Reference Number (SRN) to HMRC.

In all cases apart from user penalties the initial penalty is determined by a Tribunal.

If a person does not have a reasonable excuse, the factors that are considered in deciding whether or not to institute penalty proceedings will include:

  • The level of knowledge/experience the person could reasonably be expected to have of DOTAS;
  • The person’s previous behaviour in relation to DOTAS;
  • The adequacy of the systems the person has put in place to ensure compliance with DOTAS;
  • The nature of the behaviour that led to the failure (e.g. was it isolated error, carelessness or a deliberate act);
  • Whether the person alerted HMRC to the failure before being prompted;
  • What the person did after the failure was discovered, or brought to their attention, to prevent any recurrence.


There is a right of appeal against any penalty imposed by HMRC or determined by a Tribunal.

Penalty rates



Disclosure penalties

Cases where no disclosure order is involved


An amount not exceeding £600 a day during the “initial period”.
If this is an insufficient deterrent, a higher penalty, not exceeding £1 million.
A secondary daily penalty, not exceeding £600, after the initial period.


Cases where no disclosure made within 10 days of a section 314A order

Both the maximum initial daily penalty and the secondary daily penalty increase to £5,000 for each day

Information penalties

An initial penalty of an amount not exceeding £5,000. HMRC may impose a daily penalty, not exceeding £600, for each day that the failure to provide information continues after an initial penalty has been determined. The maximum daily penalty increases to £5,000 per day after an order under sections 306A or 314A.


The user penalty

A scheme user who fails to comply with a section 313 obligation to report a SRN and related information is liable to a penalty of:


£100 per scheme (i.e. each scheme to which the failure relates) for a first occasion;


£500 per scheme on the second occasion within 3 years (whether or not it relates to the same scheme involved in the previous occasion); and


£1,000 per scheme on the third and subsequent occasions (whether or not the failure relates to schemes involved in a previous occasion).


Failures involving both NICs and Income tax

No disclosure penalty will be charged for a failure to disclose a NI contribution arrangement if the arrangement, or substantially the same arrangement, is also a disclosable income tax arrangement and a penalty has been imposed for failing to disclose that arrangement.

The same principle applies in relation to information and user penalties.


From 1 June 2019 all DOTAS penalties will carry late payment interest and repayment supplement at the standard HMRC interest rates.

Small print and links

An Overview of the DOTAS regime

HMRC’s guidance on Anti-avoidance

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