26 March 2025

The Government and HM Revenue and Customs (HMRC) have been using current measure to stop the promotion of tax avoidance schemes, primarily in the umbrella company market. As part of the Spring Statement, a new consultation has been released: Closing in on promoters of tax avoidance.

Over the past year we have seen many additions to the Current list of named tax avoidance schemes, promoters, enablers and suppliers.

The government wants to continue to close the opportunities to operate and promote such schemes and wants feedback on four main areas in this consultation:

  • expanding the scope of the Disclosure of Tax Avoidance Schemes (DOTAS) regime
    • a new hallmark to more clearly target disguised remuneration schemes
    • a criminal offence for failure to notify arrangements under DOTAS
    • updating the DOTAS civil penalty regime
  • introducing a Universal Stop Notice (USN) and Promoter Action Notice (PAN)
    • USN would go further than a Stop Notice, requiring all persons to stop promoting or enabling the schemes
    • A PAN would require businesses to stop providing products or services connected with tax avoidance schemes
  • tackling controlling minds and those behind the promotion of avoidance schemes through new highly targeted obligations and stronger information powers
    • would potentially give HMRC the power to :
      • publish their details on GOV.UK so potential users are warned of the risks and can identify, steer clear of and exit the schemes they promote
      • issue POTAS Stop Notices directly to them and, if they fail to comply with the obligations under the Notice, issue significant civil penalties or pursue criminal proceedings
      • apply to the court for winding up and/or disqualification orders which could prohibit them from being a director or from acting in the promotion, formation, or management of a company for a period of up to 15 years
      • issue Joint and Several Liability notices, making them personally liable for the tax debts and penalties incurred by the companies they control when the companies have started, or are likely to start, insolvency
      • take action where there are failures under the new USN proposal
      • under the new PAN proposal, require businesses to stop providing products and services to promoters and enablers which are used to facilitate promotion of avoidance, such as banking services
      • exchange information with other countries and fiscal authorities under the UK’s tax treaty powers so that appropriate action can be taken against promoters
  • exploring options to tackle legal professionals designing or contributing to the promotion of avoidance schemes
    • Open transparency in the use and creation of tax avoidance schemes where legal professional privilege (LPP) is a barrier to HMRC investigation.

As payroll processes are used to facilitate the non-payment of tax and National Insurance contributions, this may have an impact on some payroll professionals, especially in the umbrella company and employment business space. Even when operating compliantly you must be aware of the changes in legislation in this space to ensure you are vigilant to third party suppliers using and promoting these schemes.

The consultation contains 62 questions and is open until 18 June 2025.


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