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Clampdown on tax avoidance on UK property

Press release -

Clampdown on tax avoidance on UK property

Under new regulations published today, for the first time schemes designed to get around the Annual Tax on Enveloped Dwellings will have to be disclosed to HM Revenue and Customs (HMRC).

Introduced in April 2013, the tax is an annual charge payable by companies that own high value residential properties. It ranges from £15,000 for a property valued between £2 million and £5 million and goes up to £140,000 for properties valued at over £20 million.

The new regulations will mean that schemes designed and marketed to avoid paying this charge will now have to be notified to HMRC.

The Disclosure of Tax Avoidance Schemes (DOTAS) ensures details of schemes designed to provide users with an unfair tax advantage must be provided to HMRC, which uses the information in its compliance work. It also helps Government consider amendments to legislation.

Penalties for not disclosing a scheme are up to £1 million and penalties for users failing to report the use of a scheme on a tax return are £100 for the first failure, £500 for the second and £1,000 for subsequent failures.

Introducing changes to DOTAS, the regulations laid today build on the work from the 2012 Lifting the Lid consultation which looked at tackling avoidance schemes. As part of the consultation, the Government proposed revising and extending DOTAS when necessary and improving the information available to HMRC.

Today’s changes add the Annual Tax on Enveloped Dwellings to the regime, where currently schemes designed to reduce a user’s tax bill for income tax, corporation tax, capital gains tax, inheritance tax, national insurance contributions, stamp duty land tax and VAT must be disclosed.

In another move to further tackle tax avoidance, promoters of avoidance schemes will now be forced to provide HMRC with details of their client’s national insurance number and unique taxpayer reference. This will make it much easier for HMRC to track down avoiders and put them under investigation.

This will also make it harder to avoid tax by using “disguised remuneration” schemes designed to avoid tax and national insurance on employment income.

Exchequer Secretary David Gauke said:

“This Government has been clear – aggressive tax avoidance is unacceptable and will not be tolerated. The regulations we are laying mark a significant strengthening of the rules and build on the considerable work we have done to tackle not only tax avoidance schemes but also the promoters of these schemes.

“HMRC has been well resourced to tackle tax avoidance and has made it clear that it will pursue those who attempt to avoid their responsibilities.” 

Notes for editors

  1. The Annual Tax on Enveloped Dwellings (ATED) came into effect on 1 April 2013 to counter avoidance of Stamp Duty Land Tax on UK residential properties valued over £2 million. Together with the changes to Stamp Duty Land Tax and Capital Gains Tax, ATED is aimed at making sure that owners of high-value properties pay their fair share of tax.
  2. The Regulations published this week take forward initiatives announced in the 2012 “Lifting the Lid” consultation.
  3. The recent consultation “Raising the Stakes” takes forward another strand of work from “Lifting the Lid”, that on high-risk promoters.
  4. Four Statutory Instruments are being laid before Parliament introducing changes to the DOTAS rules so that, for the first time, schemes that avoid the Annual Tax on Enveloped Dwellings and on employment income are disclosable to HMRC.
  5. The Statutory Instruments also enact the Finance Act 2013 changes that require users of avoidance schemes to tell the scheme promoter their national insurance number and unique taxpayer reference. The promoter is then obliged to give this information to HMRC so that the users of an avoidance scheme can easily be traced.
  6. Regulations have also been introduced to require disclosure of employment income schemes and, lastly, the confidentiality hallmark for disclosure has been enhanced.
  7. The Statutory Instruments will come into effect on 4 November.
  8. Tempted by Tax Avoidance?” explains more about the pitfalls of tax avoidance schemes.


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Issued by HM Revenue & Customs Press Office

HM Revenue & Customs (HMRC) is the UK’s tax authority.

HMRC is responsible for making sure that the money is available to fund the UK’s public services and for helping families and individuals with targeted financial support.

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HMRC Press Office

HMRC Press Office

Press contact 03000 585 018

HM Revenue & Customs (HMRC) is the UK’s tax authority

HMRC is responsible for making sure that the money is available to fund the UK’s public services and for helping families and individuals with targeted financial support.

HM Revenue & Customs (HMRC)
100 Parliament St
SW1A 2BQ London