New system for notifying tax-saving schemes
Indirect tax schemes. Since 2006 if you use a scheme or plan transactions where one of the main purposes is to gain a tax advantage for indirect, e.g. VAT, stamp duty etc., you must notify HMRC. The procedure for notifying HMRC changed on 1 January 2018. This doesn’t apply to normal commercial transactions which reduces the tax payable, for example, reclaiming VAT on the purchase of goods or services.
New or old. The new procedure only applies to arrangements entered into on or after 1 January; the previous system must be used for earlier arrangements. Failing to notify HMRC can result in a penalty of up to £5,000 the first time and higher penalties thereafter. Tip. If you’re unsure whether to notify HMRC, its Notice 799 for the new system, and Notice 700/8 for the old, provide detailed information on what type of arrangements are covered (see The next step ).
For links to the HMRC notices, visit http://tipsandadvice-tax.co.uk/download (TXÂ 18.08.08).