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HMRC internal manual

National Insurance Manual

NICs avoidance: Disclosure of Tax Avoidance Schemes: NICs legislation - from 4 November 2013


For general information about the introduction of section 132A of the SSAA 1992 see NIM58050.

Section 132A includes powers to make regulations requiring, or relating to, the disclosure of information in relation to any notifiable contribution arrangement or proposal, see NIM58100.

Changes effective from 4 November 2013

One part of HMRC’s anti-avoidance strategy is to detect avoidance early.

The DOTAS regime is a key component of the detection element of the strategy. For more information see NIM58100.

The regime works by requiring a promoter (and in some cases users) to provide information to HMRC about schemes falling within certain descriptions (known as hallmarks), which might be expected to provide a tax advantage as a main benefit.

Technical changes to the DOTAS rules were made in

  • FA 2013, and
  • The Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) (Amendment) Regulations 2013 (SI 2013 No 2595), which came into force from 4 November 2013.

These Regulations amend the Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) Regulations 2006 to clarify aspects of the confidentiality hallmarks and to introduce a new hallmark relating to employment income provided through third parties.

The changes to the confidentiality hallmarks are to

  • make it clear that regulation 6(2) of the Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) Regulations 2006 (SI 2006 No 1543) applies in the same way as regulation 6(1), and
  • resolve uncertainty about the application of regulation 7, so that HMRC receives disclosures of “in-house” schemes.

The “employment income provided through third parties” hallmark removes any doubt as to whether it is necessary to disclose schemes which are intended to circumvent the “disguised remuneration” rules in Part 7A of ITEPA 2003 and regulation 22B of the SSCR 2001, see NIM52001 onwards.

The National Insurance Contributions (Application of Part 7 of the Finance Act 2004) (Amendment) Regulations 2013 (SI 2013 No 2600) came into force on 4 November 2013 and ensured that the changes applied to NICs.