The Tax Avoidance Schemes (Penalty) Regulations 2007

Statutory Instruments

2007 No. 3104

taxes

The Tax Avoidance Schemes (Penalty) Regulations 2007

Made

30th October 2007

Coming into force in accordance with regulation 1

A draft of these Regulations was laid before, and approved by, the House of Commons.

Accordingly, the Treasury make the following Regulations in exercise of the powers conferred by section 98C(2A) to (2C)(a) of the Taxes Management Act 1970(1):

Citation and commencement

1.  These Regulations may be cited as the Tax Avoidance Schemes (Penalty) Regulations 2007 and shall come into force 21 days after they are made.

Interpretation

2.  In these Regulations—

“FA 2004” means the Finance Act 2004; and

“TMA 1970” means the Taxes Management Act 1970.

Increased penalty following the making of an order under section 306A of FA 2004

3.  Where a penalty is imposed under section 98C(1) of TMA 1970 following the making of an order under section 306A of FA 2004(2), the amount specified in section 98C(1)(b) of TMA 1970 (daily penalty) is increased to £5,000.

Increased penalty following the making of an order under section 314A of FA 2004

4.  Where a penalty is imposed under section 98C(1) of TMA 1970 following the making of an order under section 314A of FA 2004(3), the amount specified in section 98C(1)(b) of TMA 1970 is increased to £5,000.

Alan Campbell

Claire Ward

Two of the Lords Commissioners of Her Majesty’s Treasury

30th October 2007

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations increase the amount of the daily penalty imposed by section 98C of the Taxes Management Act 1970(c. 9). Section 98C penalises the failure to comply with the notification requirements of Part 7 of the Finance Act 2004 (c. 12). Part 7 of the Finance Act 2004 was amended by the Finance Act 2007 (c 11) to create new obligations on promoters to provide information in respect of tax avoidance schemes. The increased penalties apply where there is a failure to provide information following the making of an order by the Special Commissioners under sections 306A and 314A of the Finance Act 2004.

These Regulations are not expected to impose any significant new costs on compliant promoters or businesses. A full regulatory impact assessment has been prepared and is available on the website of HM Revenue and Customs at http://www.hmrc.gov.uk/ria/ria-tax-avoid-disc.pdf or in hard copy from the Ministerial Correspondence Unit,

(1)

1970 (c. 9); section was inserted by section 108(9)(b) of the Finance Act 2007 (c. 11).

(2)

2004 c.12; section 306A was inserted by section 108(2) of the Finance Act 2007.

(3)

Section 314A was inserted by section 108(4) of the Finance Act 2007.