In HMRC v Redbox Tax Associates LLP [2021] TC8235, the First Tier Tribunal (FTT) held that a loss scheme should have been notified under the Disclosure of Tax Avoidance Scheme (DOTAS) rules. There were arrangements, premium fees were charged and it was a standardised tax product.

The DOTAS legislation in Part 7 of Finance Act 2004 provides that certain tax arrangements are notifiable to HMRC. Parties to such arrangements including promoters are liable to Penalties if they fail to notify such arrangements.

Redbox Tax Associates LLP (Redbox) promoted a scheme, ‘Volatility’, involving paired forward contracts to purchase and sell securities and create either capital losses or miscellaneous income losses.

The FTT found that the scheme was notifiable under DOTAS:

Useful guides on this topic

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

Penalties: DOTAS
What are the penalties for failure to disclose under the Disclosure of Tax Avoidance Schemes (DOTAS) regulations?

Tax avoidance schemes
How do you spot tax avoidance schemes? What are the types of schemes available that should be avoided? What disclosure requirements are there? When are tax clearances needed?

External link

HMRC v Redbox Tax Associates LLP [2021] TC8235 

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