The new powers tackling promoters of avoidance schemes

Under new proposals in draft Finance Bill 2021, HMRC will have wider information powers and be able to impose tougher sanctions on those who continue to promote or enable tax avoidance schemes. The draft provisions strengthen three existing regimes: the promoters of tax avoidance schemes (POTAS) rules (by widening HMRC’s stop notice powers); the disclosure of tax avoidance schemes (DOTAS) rules (primarily by introducing a new information notice that could be issued in a wider range of circumstances); and the general anti-abuse rule (GAAR) regime (so that it would apply to partners and partnerships who enter abusive arrangements). Whilst a robust approach to tackle unacceptable behaviour by a minority of promoters is entirely welcome, the new rules would arguably impose unnecessary administrative burdens on those operating within the law.