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In HMRC v Root2 Tax Ltd [2017] TC 06115, the First Tier Tribunal (FTT) found that an employee reward scheme did meet the criteria for disclosure under DOTAS and should have been disclosed by the promoters.

A tax arrangement must be disclosed to HMRC under DOTAS when:

The ‘Alchemy’ scheme involved an employee entering into almost simultaneous spread bets and hedging transactions.

The FTT disagreed and found that the arrangements were notifiable:

This is the first case to have been heard in respect of a DOTAS notification. The effect of the decision is twofold; it enables HMRC not only to penalise Root2 for failing to notify the scheme under the DOTAS regulations, but also to issue Accelerated Payment Notices (APNs) on all taxpayers who took part in the scheme. Under the DOTAS rules there is no right of appeal against the decision which leaves judicial review as the only possible remaining option.

Links:

HMRC v Root2 Tax Ltd [2017] TC 06115