DOTAS figures show sharp drop in avoidance schemes

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The number of schemes registered under the Disclosure Of Tax Avoidance Schemes (DOTAS) rules in all categories has declined sharply according to the latest statistics from HMRC, highlighting a changing approach to tax planning, reports chartered accountants Harris & Co.

According to the latest data, which covers the period April to September 2013, no tax avoidance schemes were disclosed in the financial, employment or IHT categories. While a handful (less than five) IHT schemes were disclosed in the two previous financial years, there have been no other disclosures since 2004.

The figures show that there have been no scheme disclosures in the financial category since April 2007 and in the employment category since April 2006. The number disclosed in the past six months under the main regime was 17, down from 59 in the previous financial year and 116 in the financial year 2011-12.

In contrast, Stamp Duty Land Tax (SDLT) avoidance schemes have been notified every year since 2005, although their numbers are decreasing from a peak of 485 in 2005-06. In the past six months, six schemes have been disclosed, compared to 18 the previous financial year and 13 the year before that.

Earlier this year a tax tribunal ruled against a SDLT avoidance scheme notified by Clifford Chance under the DOTAS regulations which attempted to eliminate all of the SDLT due on the purchase of Chelsea Barracks from the Ministry of Defence by a consortium known as Project Blue Ltd in January 2008.

The First Tier Tribunal (FTT) ruled that £50m was owed in SDLT and that without the scheme the purchasers would have only paid £38m. The judgment affects 24 similar commercial cases and around 900 mass market residential cases, protecting £85m in tax.

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