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Disclosure of tax avoidance schemes

11 May 2011

On 1 August 2004 statutory provisions came into effect requiring the disclosure of tax avoidance schemes (DOTAS) to HM Revenue & Customs (HMRC). Tax avoidance schemes are arrangements that enable a person to obtain a tax advantage.

    DOTAS currently covers the following taxes:
  • capital gains tax
  • corporation tax
  • income tax
  • inheritance tax, from 6 April 2011
  • NICs
  • stamp duty land tax
  • VAT

Legal status

This practice note is the Law Society's view of good practice in this area. It is not legal advice.

Practice notes are issued by the Law Society for the use and benefit of its members. They represent the Law Society's view of good practice in a particular area. They are not intended to be the only standard of good practice that solicitors can follow. You are not required to follow them, but doing so will make it easier to account to oversight bodies for your actions.

Practice notes are not legal advice, nor do they necessarily provide a defence to complaints of misconduct or of inadequate professional service. While care has been taken to ensure that they are accurate, up to date and useful, the Law Society will not accept any legal liability in relation to them.

For queries or comments on this practice note contact the Law Society's Practice Advice Service.

SRA Principles

There are ten mandatory principles which apply to all those the SRA regulates and to all aspects of practice. The principles can be found in the SRA Handbook.

The principles apply to solicitors or managers of authorised bodies who are practising from an office outside the UK. They also apply if you are a lawyer-controlled body practising from an office outside the UK.

Terminology

Must - A specific requirement in the Solicitor's Code of Conduct or legislation. You must comply, unless there specific exemptions or defences provided for in the code of conduct or relevant legislation.

Should - Good practice for most situations in the Law Society's view. If you do not follow this, you must be able to justify to oversight bodies why this is appropriate, either for your practice, or in the particular retainer.

May - A non-exhaustive list of options for meeting your obligations. Which option you choose is determined by the risk profile of the individual practice, client or retainer. You must be able to justify why this was an appropriate option to oversight bodies.

DOTAS - Disclosure of tax avoidance schemes

HMRC - Her Majesty's Revenue and Customs

IHT - Inheritance tax

Notifiable arrangement - An arrangement that enables or might be expected to enable someone to obtain a tax advantage, and where the main benefit, or one of the main benefits, that might be expected to arise from the arrangements is the obtaining of that advantage.

Notifiable Proposals - A proposal for arrangements that would be a notifiable arrangement if entered into.

SRN - Scheme reference number

The Law Society also provides a full glossary of other terms used throughout this practice note

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Practice Advice Service

The Practice Advice Service provides a dedicated support line for Law Society members and employees of law firms. Call us on 020 7320 5675.

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