Tag Archives: tax-avoidance

VAT: HMRC updates tax avoidance schemes guidance – Stop Notices

By   8 May 2025
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HMRC has updated its guidance on promoters of tax avoidance schemes (guidance on Part 5 and Schedules 34 to 36 of the Finance Act 2014).

The guidance explains the rules that apply to promoters of tax avoidance schemes. These rules aim to deter the development and use of avoidance schemes by influencing the behaviour of promoters, their intermediaries, and clients.

Stop Notices

These Notices are covered by The Finance Act 2021, Schedule 30, part 1, section 236A

  1. An authorised officer may give a person a Notice (a “Stop Notice”) if the authorised officer suspects that the recipient promotes, or has promoted, arrangements of a description specified in the notice or proposals for such arrangements.

 HMRC issues Stop Notices to promotors of tax avoidance schemes, requiring them to stop selling or promoting the scheme.

The main aim of issuing these Notices is to reduce the number of tax avoidance schemes that are being marketed. This makes it more difficult for taxpayers to get involved in them.

When HMRC issues a stop notice to a promoter, it means:

  • the promoter who receives the notice must stop selling the specified scheme
  • the promoter who receives the notice must also pass a copy of it to certain associated persons, who are also subject to the stop notice and must also stop selling the specified scheme
  • all those persons subject to the notice must inform HMRC of all the people they have promoted the scheme to and any they continue to promote it to
  • the persons subject to the stop notice must inform all clients and intermediaries that they are subject to a stop notice, what this means, and provide them with a copy of the stop notice

If a promoter fails to comply with a stop notice they can face penalties of up to £100,000 which can increase to £1million.

Our approach to planning and HMRC

Marcus Ward Consultancy Ltd does not market, advise on, or advocate aggressive schemes. The company provides bespoke solutions to an individual business and does not believe in “one size fits all” mass-marketed schemes.  We will always work within the law and the spirit of the law.  We operate a full disclosure policy and may refuse to work with you if you do not subscribe to this attitude.  We will, on occasion, cross swords with HMRC if we believe we are correct and that HMRC is being unreasonable and we will fight to uphold our clients’ rights against any unfair accusations.

HMRC actions to counter tax avoidance

By   1 April 2025
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In the Spring Statement 2025 HMG announced a package of measures that will affect VAT and other taxes. The aim is to close the tax gap and raise over £1 billion in additional gross tax revenue per year by 2029‑30.

Anti-fraud

HMRC is expanding its counter-fraud capability to increase the number of annual charging decisions for the most harmful fraud by 20%. Additional criminal investigations is intended to deliver a strong deterrent. This will include tackling those who undermine legitimate trade and small business, fraud committed by the wealthy, fraud facilitated by those in large corporations, and by individuals and companies who make it possible for others to hide money offshore.

Snitching

There will be a new HMRC reward scheme for informants will be launched later this year. This will target serious non-compliance in large corporates, wealthy individuals, offshore and avoidance schemes. The new scheme will reward informants with compensation linked to a percentage of any tax taken as a result of their actions.

“Phoenixism”

HMRC, Companies House, and the Insolvency Service will deliver a joint plan to tackle those who use contrived insolvencies to evade tax and write off debts owed to others. This will include increasing the use of upfront payment demands, making more directors personally liable for company taxes, and increasing the number of enforcement sanctions.

Compliance

HMG will invest £87 million over the next five years in HMRC’s existing partnerships with private sector debt collection agencies to collect more unpaid tax debts. It will also invest £114 million over the next five years to recruit an additional 600 HMRC debt management staff. In addition, the Government will invest £100 million over the next five years to recruit an additional 500 HMRC compliance staff.

The government also published four consultations on:

  • How HMRC can make better use of third‑party data to increase automation and close the tax gap.
  • Proposals to strengthen HMRC’s ability to take action against those tax advisers who facilitate non‑compliance from their clients.
  • A comprehensive package of measures to close in on promoters of marketed tax avoidance, whose contrived schemes leave their clients with unexpected tax bills.
  • Options to simplify and strengthen HMRC’s inaccuracy and failure to notify penalties.