This research analyses the Disclosure of Tax Avoidance Schemes (DOTAS) regime – one of the most recent tools in HMRC’s antiavoidance toolkit. It also considers claims made by HMRC as to its success in the light of the evidence that is available and identifies further issues that require investigation before a fuller evaluation of the regime can be made.
The DOTAS regime has two objectives: an information objective and a deterrence objective. In the light of these objectives, the research considers whether the disclosure regime strikes the right balance between under and over-inclusiveness, to ensure adequate detection without undue cost to taxpayers or overload for HMRC. It also asks whether the disclosure regime is itself easily avoided.
The research seeks to evaluate DOTAS’s impact, and the robustness of HMRC’s claims in this respect, on the basis of the limited available public information. Overall, there is anecdotal evidence and some limited statistical evidence, to support the view that the DOTAS regime is having a measure of success. But HMRC’s claims that this is highly successful have to be set against the frequency with which DOTAS is being amended to make it more robust against avoidance, which suggests some concern as to its scope and operation.
The research concludes that further information is required to make a more meaningful assessment. An appendix to the paper lists a number of questions which seek to elicit information towards this end.
Michael Devereux, Judith Freedman and John Vella, The Disclosure of Tax Avoidance Schemes Regime, CBT Report