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HMRC internal manual

National Insurance Manual

NICs avoidance: Disclosure of Tax Avoidance Schemes: general


NIM42001 (to be published at a later date) explains what tax and NICs avoidance is.

HMRC’s anti-avoidance strategy has three core elements

  • preventing tax and NICs avoidance at the outset where possible
  • detecting avoidance early where it persists
  • countering it by HMRC challenging it effectively.

The Disclosure of Tax Avoidance Schemes (DOTAS) regime

This regime works by requiring a promoter (and in some cases users) of tax avoidance schemes to provide information to HMRC about those schemes which fall within certain descriptions (known as hallmarks), that might be expected to provide a tax/NICs advantage as a main benefit. A tax/NICs arrangement must be disclosed when

  • it will, or might be expected to, enable any person to obtain a tax/NICs advantage
  • that tax/NICs advantage is, or might be expected to be, the main benefit or one of the main benefits of the arrangement
  • it is a tax/NICs arrangement that falls within any description (known as ‘hallmarks’) prescribed in the relevant regulations.

A scheme reference number (SRN) system is allocated to identify users of such schemes. When a promoter discloses a scheme, HMRC may allocate a SRN and notify it to the promoter. The promoter must pass the SRN to clients who in turn must identify themselves to HMRC by reporting the information back to HMRC, usually on a return, but sometimes separately.

This is a key component of the detection element of the strategy. It enables HMRC to

  • get early information about avoidance schemes and how they work - informing anti-avoidance legislation
  • get information about who has used the scheme - informing HMRC’s operational response
  • reduce the supply of avoidance schemes and deter promoters and users from getting into avoidance.

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(This content has been withheld because of exemptions in the Freedom of Information Act 2000) AHP3400(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

HMRC guidance on DOTAS is available on theGov.UK internet site (PDF 647kb).

For guidance about how the DOTAS regime is applied to NICs by legislation, see NIM58050.