Finance Act 2021

1 After section 236 (of FA 2014) insert—

“Stop notices

236A Power to give stop notices

(1) An authorised officer may give a person a notice (a “stop notice”) if the authorised officer suspects that the recipient promotes, or has promoted, arrangements of a description specified in the notice or proposals for such arrangements.

(2) A description of arrangements may be specified in a stop notice only if the authorised officer considers that—

(a) condition A and any of conditions B and C are met, or

(b) conditions B and D are met.

(3) Condition A is that arrangements of that description—

(a) would, if the arrangements had been implemented before 5 April 2019, have been likely to—

(i) cause a person to be treated as taking a relevant step for the purposes of Part 7A of ITEPA 2003 by virtue of paragraph 1(1) of Schedule 11 to F(No.2)A 2017 (loan charge: employment income), or

(ii) cause a relevant benefit to be treated as arising for the purposes of section 23A to 23H of ITTOIA 2005 by virtue of paragraph 1 of Schedule 12 to F(No.2)A 2017 (loan charge: trading income),

(b) would be the same, or similar, in form or effect to arrangements or proposed arrangements to which a reference number has been allocated under section 311 of FA 2004 or paragraph 22 of Schedule 17 to F(No.2)A 2017,

(c) would be the same, or similar, in form or effect to arrangements in relation to which a person has been given a follower notice under section 204 (circumstances in which a follower notice may be given), or

(d) would be the same, or similar, in form or effect to arrangements of a description specified in regulations made by the Commissioners under this section.

(4) Condition B is that—

(a) arrangements of that description, or proposals for such arrangements, have been, or are likely to be, marketed (in any manner, whether by the recipient of the stop notice or otherwise) as capable of enabling a person to obtain a particular tax advantage, and

(b) it is more likely than not that arrangements of that description are not capable of enabling that advantage to be obtained.

(5) Condition C is that condition A is met as a result of the allocation of a reference number under section 311 of FA 2004 or paragraph 22 of Schedule 17 to F(No.2)A 2017 in relation to arrangements or proposed arrangements (the “reference arrangements”) and—

(a) HMRC has required any person to provide information or documents under section 310A or 311C of FA 2004 or paragraph 19 or 22C of Schedule 17 to F(No.2)A 2017 in relation to the reference arrangements and that person has not complied with that requirement, or

(b) HMRC has made an application to the tribunal under section 308A(2) of FA 2004 or paragraph 16 of Schedule 17 to F(No.2)A 2017 in relation to the reference arrangements.

(6) Condition D is that—

(a) arrangements of that description or proposals for such arrangements would be relevant arrangements or relevant proposals (see section 234), and

(b) the recipient of the notice is subject to a conduct notice or a monitoring notice.

(7) For the purposes of this section, and sections 236B to 236K and 272A, a person promotes arrangements or a proposal for arrangements if the person does anything in connection with those arrangements or that proposal that would, if those arrangements or that proposal were relevant arrangements or a relevant proposal, cause the person to be carrying on a business as a promoter, or to be treated as such, for the purposes of this Part.

236B Effect of stop notices

(1) A person subject to a stop notice must not promote—

(a) any arrangements that meet the description specified in the notice or that have a similar form or effect to arrangements of that description, or

(b) any proposal for such arrangements.

(2) A person is subject to a stop notice for the purposes of this Part if—

(a) the person is the recipient of the notice;

(b) the person is a body corporate or partnership that the recipient of the notice controls or has significant influence over;

(c) the person controls or has significant influence over a body corporate or partnership that is the recipient of the notice;

(d) the recipient of the notice makes a relevant transfer to the person.

(3) If the recipient of a stop notice controls or has significant influence over a person that is a body corporate or partnership, the recipient must—

(a) within 5 days of the giving of the notice, give a copy of the notice to that person, and

(b) within 15 days of the giving of the notice, provide HMRC with the information mentioned in subsection (6) in relation to that person.

(4) If the recipient of a stop notice is a body corporate or partnership, it must—

(a) within 5 days of the giving of the notice, give a copy of the notice to each person who controls or has significant influence over it, and

(b) within 15 days of the giving of the notice, provide HMRC with the information mentioned in subsection (6) in relation to each such person.

(5) If the recipient of a stop notice makes a relevant transfer to a person, the recipient must—

(a) before making the transfer, give a copy of the notice to that person, and

(b) within 15 days of making the transfer, provide HMRC with the information mentioned in subsection (6) in relation to that person.

(6) The information referred to in subsections (3)(b), (4)(b) and (5)(b) in relation to a person is—

(a) the person’s name;

(b) any name under which the person carries on a business and any previous name or pseudonym known by the recipient of the stop notice;

(c) the person’s business address or registered office.

(7) An authorised officer may give a copy of a stop notice to any person the officer considers the recipient of the notice is obliged to give a copy to as a result of subsection (3)(a), (4)(a) or (5)(b) (but this does not affect the obligation of the recipient to do so).

(8) Sub-paragraphs (5) to (11) of paragraph 13A of Schedule 34 (meaning of “control” and “significant influence”) apply to this section as they apply to Part 2 of that Schedule.

(9) In this section “relevant transfer” has the meaning it has in paragraph 5 of Schedule 33A (promotion structures).

236C Quarterly returns

(1) A person subject to a stop notice must provide a return to HMRC containing the information described in subsection (4) for each relevant period.

(2) The first relevant period is the 3 month period commencing on the day the stop notice was given to its recipient.

(3) Each successive 3 month period that commences within the period of 3 years commencing on that day is a relevant period.

(4) The information that must be contained in a return under subsection (1) is—

(a) the number (which may be nil) of relevant clients of the person subject to the stop notice in the relevant period to which the return relates,

(b) if the return is the return for the first relevant period, the number (which may be nil) of relevant clients of the person in the period ending with the commencement of the first relevant period,

(c) in respect of each relevant client—

(i) the client’s name and address,

(ii) the unique taxpayer reference number (if any) allocated to the client by HMRC, and

(iii) the client’s national insurance number (if any),

(d) any name by which any such arrangements or proposal is known or is marketed.

(5) For the purposes of this section, a person (“C”) is a “relevant client” of a person subject to a stop notice (“P”) in a period if at any time during that period—

(a) P has made a firm approach to C in relation to a proposal for arrangements that fall within the description specified in the stop notice;

(b) P has made the proposal available for implementation by C;

(c) P has provided services to C in relation to arrangements falling within the description specified in the stop notice, or in relation to a proposal for such arrangements.

(6) If the person does not have the information referred to in subsection (4)(c)(ii) or (iii) in respect of a relevant client, the return must instead include a statement of that fact.

(7) A return for a relevant period must be provided to HMRC before the end of the period of 15 days commencing on the last day of the relevant period.

(8) An authorised officer may by notice to a person subject to the obligation to make a return under sub-paragraph (1) provide for that obligation to cease to have effect in relation to that person from such time as may be specified in the notice.

236D Withdrawal of stop notices

(1) A person subject to a stop notice may make a request for the notice to cease to have effect in relation to that person if the person—

(a) does not intend to promote, and has not promoted, arrangements that fall within the description of arrangements specified in the notice or proposals for such arrangements,

(b) considers that the conditions for specifying the description of arrangements (see section 236A(2)) were not met, or

(c) considers that there are other reasons for it to cease to have effect.

(2) A request under subsection (1) must—

(a) be made in writing to an authorised officer,

(b) be made before the end of the period of 30 days beginning with the day on which the stop notice was given,

(c) contain an explanation of the basis for the request, and

(d) be accompanied by such evidence to support that explanation as is reasonable to provide in the circumstances.

(3) The authorised officer to whom the request is made must decide whether or not the notice is to cease to have effect in relation to the person who made the request.

(4) The authorised officer must give the person who made the request a notice setting out the officer’s decision (“a decision notice”) before the end of the period of 45 days beginning with the day on which the request was received.

(5) If at the end of that period the authorised officer has not given a decision notice, the stop notice ceases to have effect in relation to the person who made the request.

(6) An authorised officer may also determine that a stop notice is to cease to have effect in relation to a person who has not made a request under subsection (1) by giving the person a notice (“a withdrawal notice”).

(7) A decision notice or a withdrawal notice that provides for a stop notice to cease to have effect in relation to a person must specify the date on which it ceases to have effect in relation to that person, which may be earlier or later than the date on which the decision notice or withdrawal notice is given.

236E Appeal against decision not to withdraw stop notice

(1) A person may appeal against a refusal by an authorised officer to grant a request that a stop notice cease to have effect in relation to that person.

(2) Notice of appeal must be given—

(a) in writing to the officer who gave the decision notice under section 236D(4), and

(b) within the period of 30 days beginning with the day on which the decision notice was given.

(3) The notice of appeal must state the grounds of appeal.

(4) The grounds of appeal that may be stated are the same as the grounds on which a person may request that a stop notice cease to have effect as mentioned in section 236D(1).

(5) On an appeal that is notified to the tribunal, the tribunal may—

(a) confirm the refusal, or

(b) direct that the stop notice is to cease to have effect in relation to a person from such date as the tribunal consider appropriate (which may be earlier or later than the date on which the tribunal makes that direction).

(6) Subject to this section, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this section.

236F Suspension of stop notice pending appeal

(1) A person who makes an appeal under section 236E may make a suspension request.

(2) A “suspension request” is a request that a stop notice which is the subject of an appeal under that section is to cease to have effect in relation to the person making the request until the appeal has been determined, withdrawn or otherwise disposed of.

(3) A suspension request must—

(a) be made in writing to the authorised officer to whom the notice of appeal was given,

(b) contain an explanation of the basis for the request, and

(c) be accompanied by such evidence to support that explanation as is reasonable to provide in the circumstances.

(4) The authorised officer to whom the suspension request is made must decide whether or not the notice is to cease to have effect in relation to the person who made the request until the appeal has been determined, withdrawn or otherwise disposed of.

(5) When deciding whether or not to grant a suspension request, the officer must have regard to the need to protect—

(a) the public revenue, and

(b) persons to whom arrangements or proposals for arrangements of the description specified in the stop notice might be marketed.

(6) The authorised officer must give the person who made the suspension request a notice setting out the officer’s decision (“a suspension decision notice”) before the end of the period of 30 days beginning with the day on which the request was received.

(7) If at the end of that period the authorised officer has not given a suspension decision notice, the stop notice ceases to have effect in relation to the person who made the request until either—

(a) the officer gives a decision notice that provides that the suspension request is not to be granted, or

(b) the appeal has been determined, withdrawn or otherwise disposed of.

236G Automatic withdrawal of certain stop notices

(1) This section applies to a stop notice if—

(a) condition A in section 236A was met in relation to the giving of that notice as a result of the allocation of a reference number under section 311 of FA 2004 or paragraph 22 of Schedule 17 to F(No.2)A 2017, and

(b) that reference number has been withdrawn.

(2) Where this section applies to a stop notice, it ceases to have effect in relation to every person who is subject to it from the time when the reference number in question was withdrawn.

(3) HMRC must give a notice to—

(a) each person who has been given a stop notice to which this section applies, and

(b) every other person that HMRC is aware was subject to that notice.

(4) A notice given under subsection (3) must state the reason for the withdrawal of the reference number in question and may contain such further explanation as HMRC consider appropriate (for example, it may contain HMRC’s view of the arrangements or proposed arrangements to which the reference number relates).

236H Publication

(1) An authorised officer may publish—

(a) the fact that a person is subject to a stop notice;

(b) details of any arrangements or proposal for arrangements promoted by that person that the officer considers meet the description specified in the notice.

(2) Publication under subsection (1) may also include the following information about the person—

(a) the person’s name;

(b) the person’s business address or registered office;

(c) any other information that the authorised officer considers it appropriate to publish in order to make clear the person’s identity.

(3) The reference in subsection (2)(a) to the person’s name includes any name under which the person carries on a business and any previous name or pseudonym.

(4) Publication of information about a person subject to a stop notice may not take place before the end of the appeal period, but an authorised officer may, at any time after the notice is given, publish the description of arrangements or proposal for arrangements specified in the notice and the fact that arrangements of that description are subject to a stop notice.

(5) The “appeal period” means—

(a) the period during which a request under section 236D(1) (withdrawal of stop notices) could be made,

(b) where such a request was made, the period during which an appeal to the tribunal against a decision notice under section 236D(4) could be brought under section 236E, or

(c) where an appeal mentioned in paragraph (b) has been brought, the period during which the proceedings on that appeal to the tribunal have not been determined, withdrawn or otherwise disposed of.

(6) For the purposes of subsection (5)(c), reference to proceedings on an appeal to the tribunal do not include any proceedings on appeal from the tribunal.

236I Publication where stop notice automatically withdrawn

(1) Where an authorised officer has published anything under section 236H in relation to a stop notice that has ceased to have effect as a result of section 236G, an authorised officer must publish—

(a) the fact it has ceased to have effect;

(b) the reason for the withdrawal of the reference number in question (see section 236G(1));

(c) such further explanation as HMRC consider appropriate.

(2) Where an authorised officer is required to publish information as a result of subsection (1), the officer may also publish information about the persons who were subject to such a stop notice (including the information mentioned in section 236H(1) and (2)).

236J Disclosure to clients and intermediaries

(1) A person (“P”) subject to a stop notice who (at any time) has promoted arrangements falling within the description specified in that notice, or has promoted a proposal for such arrangements, must give a notice to—

(a) each of P’s clients in relation to those arrangements or that proposal, and

(b) each person who P could reasonably be expected to know is an intermediary in relation to any such proposal.

(2) The notice must—

(a) set out the fact that a person is subject to a stop notice,

(b) set out the fact that the arrangements or proposed arrangements the recipient of the notice is a client or intermediary in relation to meets the description of arrangements specified in the notice, and

(c) be accompanied with a copy of the stop notice.

(3) A person (“C”) is a client of P if—

(a) P has made a firm approach to C in relation to a proposal for arrangements that fall within the description specified in the stop notice,

(b) P has made the proposal available for implementation by C, or

(c) P has provided services to C in relation to arrangements falling within the description specified in the stop notice, or in relation to a proposal for such arrangements.

(4) A notice under this section must be given—

(a) to each person who was a client of P on or before the day on which P became aware that P was subject to the notice, within 5 days of that day;

(b) to each person that P could reasonably be expected to know was an intermediary in relation to the proposal in question on or before the day on which P became aware that P was subject to the notice, within 5 days of that day;

(c) to each person that P subsequently becomes aware is an intermediary in relation to the proposal in question, within 5 days of P becoming so aware.

236K Notification of interested persons by HMRC

(1) This section applies if an authorised officer suspects that a person subject to a stop notice has failed to comply with section 236B(1).

(2) Where this section applies, the officer may provide a copy of the stop notice to any person the officer considers might be affected by that failure or the giving of the stop notice (for example, any person who is a client of the person who failed to comply with section 236B(1) or who otherwise makes use of arrangements that must not be promoted as a result of the stop notice).

(3) Where the officer provides a copy of a stop notice to a person under subsection (2) the officer may also provide any of the following information to that person—

(a) the name of the person who failed to comply with section 236B(1);

(b) the business address or registered office of that person;

(c) any other information that the authorised officer considers it appropriate to provide in order to make clear the identity of that person;

(d) details of any arrangements or proposal for arrangements promoted by that person that meet the description specified in it;

(e) an explanation of the effect of the stop notice;

(f) an explanation of why the stop notice was given.”