Is tax avoidance permitted?

I thought tax avoidance (as opposed to tax evasion) was permitted but the partner I work for has just referred to the Disclosure Of Tax Avoidance Schemes (DOTAS). Please can you give me some information about this?

Tax avoidance schemes are arrangements that enable a person to obtain a tax advantage. There are statutory provisions which require disclosure to HM Revenue & Customs (HMRC) under the DOTAS regime.

DOTAS currently covers the following taxes:

  • Capital gains tax
  • Corporation tax
  • Income tax
  • Inheritance tax
  • National insurance contributions
  • Stamp duty land tax
  • VAT

HMRC has stated that the purpose of the DOTAS regime is to:

  • identify as early as possible schemes that are being used
  • challenge avoidance schemes by contesting returns and, where necessary, pursuing the matter through the courts, and
  • produce legislative changes that will close down avoidance schemes where litigation is not appropriate or where the amount of tax at stake is particularly large.

For further details about the DOTAS provisions, and for details of when you may need to make a disclosure (including the legal professional privilege exception) please see the Disclosure of tax avoidance schemes practice note.

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Disclaimer: While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.

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