The Indirect Taxes (Disclosure of Avoidance Schemes) Regulations 2017

EXPLANATORY NOTE

(This note is not part of the Regulations)

The Regulations are made further to the provisions contained in Schedule 17 (“the Schedule”) to the Finance (No. 2) Act 2017 (c. 32). The Schedule makes provision in respect of the disclosure of avoidance schemes, being schemes which enable a person to obtain a tax advantage (defined in paragraphs 6 and 7 of the Schedule), concerning VAT and other indirect taxes (a list of indirect taxes to which the Schedule applies is set out at paragraph 2(1) of the Schedule).

Regulation 2 contains definitions used in the Regulations, including tax identifier number.

Part 2 of the Regulations provides for those persons who are not to be treated as a promoter (see paragraph 8 of the Schedule). Regulation 3 concerns companies which provide services to other members of the same group. Regulation 4 concerns employees of a promoter who are not to be treated as promoters. Regulation 5 provides that persons are not promoters where legal professional privilege applies. Regulation 6 sets out other circumstances in which a person who would otherwise be a promoter is not to be regarded as a promoter.

Part 3 of the Regulations prescribes information, periods and times in relation to notifiable proposals and notifiable arrangements (see paragraph 3 of the Schedule).

Regulation 7 prescribes information which must be provided by promoters and others further to the following paragraphs of the Schedule—

• paragraphs 11(1) and 12(1) – duties of promoter in relation to a notifiable proposals or arrangements;

• paragraph 17(2) – duty of person dealing with promoter outside the United Kingdom; and

• paragraph 18(2) – duty of parties to notifiable arrangements not involving promoter.

The information includes the name and address of the promoter, details of the indirect taxes in question and a summary and explanation of the notifiable proposals or arrangements.

Regulation 8 prescribes times for the purposes of paragraph 18(2) of the Schedule.

Regulation 9 prescribes information which must be provided further to the following paragraphs of the Schedule—

• paragraph 23(2) – duty of promoter to notify client of numbers;

• paragraph 24(3) – duty of client to provide parties of numbers.

The information includes details of the promoter, a summary of the notifiable proposals or arrangements and the applicable reference numbers (see paragraph 22(4) of the Schedule).

Regulation 10 prescribes information which must be provided further to paragraph 25 of the Schedule (duty of client to provide information to promoter), including each tax identifier number provided to the client.

Regulation 11 prescribes information which must be provided further to paragraph 26(1) of the Schedule (duty of parties to notifiable arrangements to notify HMRC of information). This includes the applicable references numbers, the accounting period in which the tax advantage is expected to arise and any tax identifier numbers. It also provides that HMRC may by notice prescribe the time for giving such information.

Regulation 12 prescribes information which must be provided further to paragraph 27(3) of the Schedule (duty of promoter to provide details of clients to HMRC). This includes applicable reference numbers, details of the clients and whether or not the clients have complied with paragraph 25(2) of the Schedule. Regulation 13 prescribes periods for the purposes of paragraph 27(3) and (4).

Regulation 14 prescribes information which must be provided further to paragraph 28(2) of the Schedule (enquiry following disclosure of client details). This includes details of persons who may sell the notifiable proposal or arrangement or who may receive a tax advantage by its implementation.

Regulation 15 prescribes information which must be provided further to paragraph 31(2) of the Schedule (provision of information to HMRC by introducers). This includes details of persons suspected of being introducers, of those who have provided the suspected introducer with information relating to the notifiable proposal or arrangement and of those with whom a marketing contact (see paragraph 10(2) of the Schedule) has been made.

A Tax Information and Impact Note covering this instrument was published on 5 December 2016 and made available alongside the Finance (No.2) Bill 2017 and is available on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. It remains an accurate summary of the impacts that apply to this instrument.