Consultation on closing in on promoters of tax avoidance

The consultation explains that 'marketed' tax avoidance involves mass-marketed Avoidance schemes, sold to one or more individuals and businesses for a fee with the aim of reducing their tax liabilities.

To allow HMRC to more efficiently and effectively disrupt the business model promoters rely on, the government seeks views on proposals in four areas:

• Expanding the scope of the Disclosure of Tax Avoidance Schemes (DOTAS) regime, to:
  • Introduce a new hallmark to more clearly target disguised remuneration schemes.
  • Create a criminal offence for failure to notify arrangements under DOTAS.
  • Update the DOTAS civil penalty regime.
• The introduction of a Universal Stop Notice (USN) and Promoter Action Notice (PAN), with sanctions for non-compliance.
  • The USN would require all persons to stop promoting or enabling schemes that are the same or similar to those outlined in the notice.
    • HMRC would issue USNs so that any promotion and enabling of schemes with arrangements similar to those described in a USN would constitute a breach of the USN.
    • ‘Similar’ would take the same meaning as in the current Stop Notice (SN) powers.
    • Breaching the USN would attract a range of sanctions, which already exist for SNs and other HMRC powers, and include publication, penalties and imprisonment of up to two years.
    • The promoter or enabler would be responsible for complying with a published USN, with safeguards including the right to make representations against the suspected failure to comply with a USN and the right to appeal to the Tax Tribunal for civil determinations against sanctions.
  • A PAN would require businesses to stop providing products or services to promoters and enablers of tax avoidance where those products or services are connected to the promotion of avoidance. 
    • Safeguards would include the right for representations against the issuing of a PAN. The issue would be considered by the Authorised Officer and a statutory right of appeal to the tax tribunal would available.
• Tackling controlling minds and those behind the promotion of avoidance schemes through new highly targeted obligations and stronger information powers.
  • Proposals include introducing a targeted Connected Parties Information Notice (CPIN) that would compel persons that HMRC suspects to be connected to the promotion of a marketed tax avoidance scheme to provide relevant information and documents.
    • It is proposed there would be strong sanctions for non-compliance.
    • The proposed information power would broadly apply the safeguards already contained within Schedule 36 to Finance Act 2008. 
  • Another proposal is the introduction of a Promoter Financial Institution Notice (PFIN) targeted towards seeking financial information about the promoter and/or controlling minds who have significant influence over the activity of a promoter entity.
    • The PFIN would be used to confirm the existence of avoidance schemes, associated connected parties and controlling minds, which is not a valid reason for issuing a Financial Institution Notice.
• Exploring options to tackle legal professionals designing or contributing to the promotion of avoidance schemes.
  • The government proposes widening the scope of Existing publishing powers to allow HMRC to publish legal professionals’ details where they have been part of designing a tax avoidance scheme when the role of the legal professional is limited to activity subject to legal professional privilege. 

The consultation closes on 18 June 2025. Responses can be made by email.

Useful guides on this topic

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?

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?

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?

Named tax avoidance schemes, promoters, enablers
HMRC publishes a list of named tax avoidance schemes, promoters, enablers and suppliers. It is not recommended that taxpayers use any of these schemes, as HMRC does not consider that they work and you may end up with a significant tax liability if you engage with the scheme suppliers.

Sch 36 Information Notices
What is a Schedule 36 Information Notice? When can HMRC issue one? What rights does the taxpayer have when an information notice is issued? What penalties apply for a failure to respond to an Information Notice?

External link

Consultation: Closing in on promoters of marketed tax avoidance

Question 1: What other ideas, in addition to the ones in this document, should the government consider to deliver its intent of closing in on promoters of marketed avoidance?

Question 2: Is there more HMRC can do to support those who use tax avoidance schemes?

Question 3: Do you think there are features of disguised remuneration schemes that could feature in a new DOTAS hallmark that makes it clearer that disclosure is required and reduces the burden on HMRC of sanctioning non-compliance?

Question 4: For the purposes of this DOTAS hallmark, should consideration be given to any specific exclusions, for example reimbursement of certain employment-related expenses?

Question 5: Are there other areas or arrangements where a new DOTAS hallmark would help the government tackle marketed tax avoidance?

Question 6: Do you agree that the twofold approach of civil penalties and a criminal offence will provide a stronger deterrent?

Question 7: Should the criminal offence be restricted to schemes where there is a promoter acting?

Question 8: What reasonable care/excuse arguments would be appropriate? How might these be framed to prevent promoters from abusing these aspects? What reasons should be excluded from reasonable excuse?

Question 9: Do you agree that moving the issuing of DOTAS penalties from the Tax Tribunal to HMRC (appealable to the Tax Tribunal) is appropriate?

Question 10: Are there any other changes to DOTAS penalties HMRC should consider?

Question 11: Do you agree that the USN and PAN proposals would help to deter and tackle tax avoidance and that the deterrent effect would be proportionate to the costs of compliance?

Question 12: Do you have any concerns or foresee any practical difficulties with the USN or PAN proposals outlined above?

Question: 13: Do you have any alternative suggestions around how businesses would be able to tackle the issue of promoters using their products and/or services?

Question 14: Do you consider that the first contact letter mentioned above would support legitimate businesses to engage with HMRC?

Question 15: Do you think that the USN is appropriately targeted? If not, could you indicate where you see the issues are and how these could be resolved?

Question 16: How reasonable do you think it is for those involved in promoting or enabling tax avoidance to be expected to be aware of a universal stop notice published on GOV.UK and what more could HMRC do to ensure that all those affected by a USN are aware?

Question 17: What reasonable care/excuse arguments would be appropriate? How might these be framed to prevent promoters from abusing these aspects?

Question 18: How should the government approach defining whether a service or product provided to a suspected promoter is connected to the promotion of avoidance?

Question 19: Should the government exclude categories of products or services from the scope of the PAN, and if so, what would those be and why?

Question 20: Do you consider that a business would be able to comply with the obligations in a PAN? If not, please explain where you see the difficulties and challenges and what could be done to overcome these.

Question 21: What level and type of information do you consider would a business need to comply with a PAN?

Question 22: Are the safeguards for USNs and PANs likely to be effective? If not, please state what could be done to enhance them.

Question 23: Do you agree that these safeguards provide the right level of protection for those who may face potential criminal prosecution? If not, what additional safeguards could be introduced?

Question 24: Are there any other safeguards that HMRC should consider to ensure the proposed power is only used in appropriate cases?

Question 25: Do you consider the proposed sanctions for a USN are proportionate? If not, what sanctions should be applied in these circumstances?

Question 26: Do you have any suggestions regarding the basis for determining a financial penalty for a USN? What scale of penalty would you consider proportionate?

Question 27: Do you agree that failure to comply with a USN should be a criminal offence? If not, what sanction should there be and how would this deter those that are currently promoting tax avoidance schemes?

Question 28: In addition to publication, financial penalties and criminal offences, are there any other sanctions or restrictions that could be applied to promoters/enablers including those who have control or significant influence over them?

Question 29: Which sanctions do you consider to be proportionate for non-compliance with a PAN? If penalties were applied, what scale would you consider proportionate?

Question 30: Under which circumstances do you consider that these sanctions should be applied?

Question 31: Where a business fails to comply with a PAN, do you consider they should be named publicly as a consequence?

Question 32: Are there any circumstances where you consider a failure to comply with a PAN should be a criminal offence?

Question 33: Do you have any views on who should or should not be covered by the CPIN proposal?

Question 34: Do you agree that a criminal offence should be a potential consequence for failure to comply with a CPIN or providing false or misleading information?

Question 35: Do you have any views on how to set civil penalties at a level which would encourage compliance from parties connected to the promotion of marketed tax avoidance schemes?

Question 36: Do you have any suggestions for alternative or additional proportionate potential consequences for non-compliance with a CPIN?

Question 37: Do you agree that these safeguards provide the right level of protection for recipients of the notice? If not, what additional safeguards could be introduced?

Question 38: Are the safeguards for this measure likely to be effective? If not, please state what could be done to enhance them.

Question 39: What are your views on extending obligations under information powers as indicated by the PFIN proposal?

Question 40: Are issues envisaged around defining FIs – for example, in relation to alternative ‘payment platforms’? How might HMRC overcome such problems?

Question 41: Should this power be subject to any additional restrictions or safeguards? If so, please state the restrictions or safeguards.

Question 42: Do you have any other ideas for options that could deliver both the objective of speeding up the process for obtaining promoters’ financial information and providing appropriate safeguards?

Question 43: Do you have any views on the requirement described above that aims to prevent the third party from notifying the promoter of the information request as described? Do you have any suggestions about any other ways that this aim could be achieved?

Question 44: Should Regulation 6 be repealed?

Question 45: Are there any risks in making such a change? For example could the change bring into scope those that we might not wish to include?

Question 46: Does the government’s proposal to retain the statutory protection for LPP material in primary legislation provide an adequate safeguard?

Question 47: Should the rules on publishing be changed to allow HMRC to publish the names of legal professionals that design tax avoidance schemes, even when most of or all their activity is subject to legal professional privilege?

Question 48: Could there be any unintended consequences from making this change?

Question 49: If the government does change the rules, as per question 47, how should HMRC utilise this information to assist taxpayers and representative bodies?

Question 50: How should we deal with the issue of representations against publishing the details of a legal professional who has designed a scheme when LPP applies?

Question 51: Would you support the introduction of a deemed waiver of LPP?

Question 52: In which circumstances should LPP be waived?

Question 53: Could a deemed waiver of LPP have any unintended consequences?

Question 54: If you support a deemed waiver, do you consider that it should be a waiver for all purposes or only limited ones? If the latter, what purposes?

Question 55: Are there other things HMRC should do to address instances where promoters rely on dubious legal advice to market avoidance schemes, or use legal advice to market avoidance schemes to persons to whom the advice was not given?

Question 56: Is there any further action that HMRC should be taking to tackle those legal professionals that are involved in the promotion of tax avoidance?

Question 57: Are there any existing powers targeted at promoters which could be strengthened with the addition of new criminal offences for non-compliance? Question 58: In what other situations would criminal sanctions be appropriate for undeterred promoters?

Question 59: What in your view are the type of sanctions that would deliver the aim of significantly disrupting the lifestyles of controlling minds?

Question 60: What further changes could be made to DOTAS to capture a wider range of tax avoidance?

Question 61: How can HMRC ensure that it obtains information from third parties in a timely fashion?

Question 62: How best do you think HMRC can use advances in technology including AI to aid its work tackling marketed tax avoidance?