News
Beware tax avoidance scheme promoters – HMRC cracks down with new powers
14 May 2025
Recent Government estimates suggest that as much as £1.8 billion is lost every year due to tax avoidance schemes.
That money, designated to fund schools, hospitals and other essential services, is in part, leading the Government to borrow more than expected.
As a result, HM Revenue & Customs (HMRC) is being given additional powers to crack down on tax avoidance and protect the public purse.
What new powers will HMRC have?
The focus of the reforms centres on an expansion of the Disclosure of Tax Avoidance Scheme (DOTAS).
A new hallmark – a specific feature or condition used by HMRC to identify tax avoidance schemes that must be disclosed – will be introduced to explicitly catch the schemes that are slipping under the radar of existing hallmarks.
This will be combined with a stricter liability offence if someone fails to notify arrangements under DOTAS.
Whether the avoidance scheme is effective or not will have no bearing on the illegality of engaging with it, and being caught will result in an unlimited fine and up to two years in prison.
HMRC will also be given the power to determine the penalty directly, leaving promoters the option to appeal to a tribunal should they feel unjustly served by the decision.
Both a Universal Stop Notice (USN) and a Promoter Action Notice (PAN) will be enacted, ensuring that those promoting and enabling schemes, or those working with promoters, stop immediately upon receiving the notice.
These stop notices form part of the targeted action that is being taken against legal professionals who provide advice and support promoters.
Time to act
HMRC want to make it clear that any involvement with tax avoidance schemes will no longer be tolerated.
As such, the onus is on you to ensure that you report any suspected attempts at tax avoidance immediately, lest you feel the consequences of collusion.
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