Finance Act 2014

Yn ddilys o 17/07/2014

238 Contents of a conduct notice U.K.

(1) A conduct notice is a notice requiring the person to whom it has been given (“the recipient”) to comply with conditions specified in the notice.

(2) Before deciding on the terms of a conduct notice, the authorised officer must give the person to whom the notice is to be given an opportunity to comment on the proposed terms of the notice.

(3) A notice may include only conditions that it is reasonable to impose for any of the following purposes—

(a) to ensure that the recipient provides adequate information to its clients about relevant proposals, and relevant arrangements, in relation to which the recipient is a promoter;

(b) to ensure that the recipient provides adequate information about relevant proposals in relation to which it is a promoter to persons who are intermediaries in relation to those proposals;

(c) to ensure that the recipient does not fail to comply with any duty under a specified disclosure provision;

(d) to ensure that the recipient does not discourage others from complying with any obligation to disclose to HMRC information of a description specified in the notice;

(e) to ensure that the recipient does not enter into an agreement with another person (“C”) which relates to a relevant proposal or relevant arrangements in relation to which the recipient is a promoter, on terms which—

(i) impose a contractual obligation on C which falls within paragraph 11(2) or (3) of Schedule 34 (contractual terms restricting disclosure), or

(ii) impose on C obligations within both paragraph 11(4) and (5) of that Schedule (contractual terms requiring contribution to fighting funds and restricting settlement of proceedings);

(f) to ensure that the recipient does not promote relevant proposals or relevant arrangements which rely on, or involve a proposal to rely on, one or more contrived or abnormal steps to produce a tax advantage;

(g) to ensure that the recipient does not fail to comply with any stop notice which has effect under paragraph 12 of Schedule 34.

(4) References in subsection (3) to ensuring that adequate information is provided about proposals or arrangements include—

(a) ensuring the adequacy of the description of the arrangements or proposed arrangements;

(b) ensuring that the information includes an adequate assessment of the risk that the arrangements or proposed arrangements will fail;

(c) ensuring that the information does not falsely state, and is not likely to create a false impression, that HMRC have (formally or informally) considered, approved or expressed a particular opinion in relation to the proposal or arrangements.

(5) In subsection (3)(c) “specified disclosure provision” means a disclosure provision that is specified in the notice; and for this purpose “disclosure provision” means any of the following—

(a) section 308 of FA 2004 (disclosure of tax avoidance schemes: duties of promoter);

(b) section 312 of FA 2004 (duty of promoter to notify client of number);

(c) sections 313ZA and 313ZB of FA 2004 (duties to provide details of clients and certain others);

(d) Part 1 of Schedule 36 to FA 2008 (duties to provide information and produce documents).

(6) In subsection (4)(b) “fail”, in relation to arrangements or proposed arrangements, means not result in a tax advantage which the arrangements or (as the case may be) proposed arrangements might be expected to result in.

(7) The Treasury may by regulations amend the definition of “disclosure provision” in subsection (5).