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DOTAS 'doesn't work'

Accountant Mike Kerridge has published a report arguing DOTAS 'doesn't work.'

The Disclosure of Tax Avoidance Schemes (DOTAS) legislation was designed to flag tax mitigation schemes to HMRC to catch them earlier and discern each scheme's evasion intent.

However, Kerridge has argued that because of the 'subjective' nature of the way in which DOTAS was written, the idea is fundamentally flawed in its application. Questions therefore need to be asked about whether advisers  should still notify HMRC of schemes they come across.

Additionally, questions have now been posed about whether DOTAS is 'no more a mechanism than to enable government to generate more tax by way of penalty'.

It has brought more light to the debate about what constitutes tax 'avoidance'. HMRC has developed a doctrine in which avoidance is where there are 'artificial, tax-motivated transactions' or 'a mismatch between economic outcome and tax outcome'.

For more information on the issue please visit Mike Kerridge's website here.

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