Disclosure of Avoidance Schemes for VAT and other indirect taxes

Monday, 11 October 2021

The way avoidance schemes for VAT and other indirect taxes are notified to the Treasury is being reformed from 1 November 2021.

From this date the primary responsibility for disclosing schemes to the Treasury will be on scheme promoters. 

Any arrangements or a proposal for arrangements are notifiable and must be disclosed to the Treasury where:

  • they enable or might be expected to enable any person to get a tax advantage in relation to indirect taxes
  • that tax advantage is, or might be expected to be, the main benefit or one of the main benefits
  • they fall within any description (the ‘hallmarks’) prescribed

Penalties can apply if notifiable proposals or arrangements are not disclosed accurately and at the right time..

The indirect taxes are:

  • Value Added Tax
  • Gambling duty
  • Machine Games duty
  • Lottery duty
  • Air passenger duty
  • Hydrocarbon oil duty
  • Tobacco products duty
  • Duties on spirits, beer, wine, made-wine and cider
  • soft drinks industry levy and
  • customs duties

These rules reflect changes already in force in the United Kingdom and more information can be found in VAT Notice 799.  Please note that where the Notice states 1 January 2018, that should be read as 1 November 2021 for Isle of Man purposes, and where the Notice states to send information to HMRC, this should be read as the Customs and Excise Division of the Treasury.

The Notice explains what is meant by 'notifiable arrangements'and 'tax advantage', when you may need to disclose, and how to disclose.

You can also contact the Customs and Excise VAT Advice Centre on +44 1624 648130.

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