HMRC have issued a new consultation, ‘Clamping down on promoters of tax avoidance’ setting out proposed new measures and the powers to allow them to further tackle promoters of tax avoidance schemes.

At a glance

The Promoters of Tax Avoidance Schemes (POTAS) rules were introduced by Finance Act 2014 with the aim of changing the behaviour of promoters of tax avoidance schemes and deterring the development and use of such schemes. The government has decided that whilst these rules are robust there is more to be done.

The current consultation follows an HMRC policy paper and earlier Consultation in July 2020 which has lead to draft legislation being included in Finance Bill 2021 and allows HMRC to:

  • Issue stop notices to promoters earlier by changing the notice conditions.
  • Challenge the individuals behind corporate promoters to stop them avoiding the POTAS rules.
  • Use Schedule 36 powers to obtain information about enablers of schemes.
  • Ensure penalties can be issued and enablers named without delay.

The government is now seeking views on a range of proposed additional measures targeted at the most persistent promoters of tax avoidance and including:

  • Clamping down on promoters who hide their assets, by ensuring HMRC have the power to ring-fence the assets to pay any relevant penalties, such as by requiring upfront security payments or issuing asset freezing orders with sanctions for non-compliance.
  • Tackling offshore promoters through their UK associates, whether they are connected or not, by making the UK entities liable for penalties linked to the offshore promoter’s business.
  • Closing down companies involved in promoting or enabling tax avoidance and disqualifying the directors, where certain conditions are met. This would include where it has been shown they are not operating in the public interest, such as where there has been a significant breach of the anti-avoidance legislation.
  • Supporting taxpayers to steer clear of or get out of tax avoidance schemes by informing them of HMRC’s enquiries into specific promoters and schemes and ensuring that they better understand whether the information they have been provided with by their promoter accurately reflects the information held by HMRC.

Responses to the consultation should be sent to This email address is being protected from spambots. You need JavaScript enabled to view it.. The closing date is 1 June 2021.

Useful guides on this topic

Promoters of Tax Avoidance Schemes (POTAS)
Who is a Promoter? What are the Promoters of Tax Avoidance Scheme rules?  What does this mean for promoters, intermediaries and clients?

DOTAS: Disclosure of tax avoidance schemes
What are rules on Disclosure of tax avoidance schemes (DOTAS)? When should you disclose your use of a tax avoidance scheme? What are the consequences of non-disclosure? How are penalties calculated?

External link

Consultation: Clamping down on promoters of tax avoidance 

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