Finance Act 2014

[F1 SCHEDULE 34A U.K. Promoters of tax avoidance schemes: defeated arrangements

Textual Amendments

F1 Sch. 34A inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 160(5)

PART 1 U.K. Introduction

1 U.K. In this Schedule—

(a) Part 2 is about the meaning of “relevant defeat”;

(b) Part 3 contains provision about when a relevant defeat is treated as occurring in relation to a person;

(c) Part 4 contains provision about when a person is treated as meeting a condition in subsection (11), (12) or (13) of section 237A;

(d) Part 5 contains definitions and other supplementary provisions.

PART 2 U.K. Meaning of “relevant defeat”

“Related” arrangements U.K.

2 (1) For the purposes of this Part of this Act, separate arrangements which persons have entered into are “related” to one another if (and only if) they are substantially the same. U.K.

(2) Sub-paragraphs (3) to (6) set out cases in which arrangements are to be treated as being “substantially the same” (if they would not otherwise be so treated under sub-paragraph (1)).

(3) Arrangements to which the same reference number has been allocated under Part 7 of FA 2004 (disclosure of tax avoidance schemes) are treated as being substantially the same.

For this purpose arrangements in relation to which information relating to a reference number has been provided in compliance with section 312 of FA 2004 are treated as arrangements to which that reference number has been allocated under Part 7 of that Act.

(4) Arrangements to which the same reference number has been allocated under paragraph 9 of Schedule 11A to VATA 1994 (disclosure of avoidance schemes) [F2 or paragraph 22 of Schedule 17 to FA 2017 (disclosure of avoidance schemes: VAT and other indirect taxes)] are treated as being substantially the same.

(5) Any two or more sets of arrangements which are the subject of follower notices given by reference to the same judicial ruling are treated as being substantially the same.

(6) Where a notice of binding has been given in relation to any arrangements (“the bound arrangements”) on the basis that they are, for the purposes of Schedule 43A to FA 2013, equivalent arrangements in relation to another set of arrangements (the “lead arrangements”)—

(a) the bound arrangements and the lead arrangements are treated as being substantially the same, and

(b) the bound arrangements are treated as being substantially the same as any other arrangements which, as a result of this sub-paragraph, are treated as substantially the same as the lead arrangements.

Textual Amendments

F2 Words in Sch. 34A para. 2(4) inserted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(2)

“Promoted arrangements” U.K.

3 (1) For the purposes of this Schedule arrangements are “promoted arrangements” in relation to a person if— U.K.

(a) they are relevant arrangements or would be relevant arrangements under the condition stated in sub-paragraph (2), and

(b) the person is carrying on a business as a promoter and—

(i) the person is or has been a promoter in relation to the arrangements, or

(ii) that would be the case if the condition in sub-paragraph (2) were met.

(2) That condition is that the definition of “tax” in section 283 includes, and has always included, value added tax.

Relevant defeat of single arrangements U.K.

4 (1) A defeat of arrangements (entered into by any person) which are promoted arrangements in relation to a person (“the promoter”) is a “relevant defeat” in relation to the promoter if the condition in sub-paragraph (2) is met. U.K.

(2) The condition is that the arrangements are not related to any other arrangements which are promoted arrangements in relation to the promoter.

(3) For the meaning of “defeat” see paragraphs 10 to 16.

Relevant defeat of related arrangements U.K.

5 (1) This paragraph applies if arrangements (entered into by any person) (“Set A”)— U.K.

(a) are promoted arrangements in relation to a person (“P”), and

(b) are related to other arrangements which are promoted arrangements in relation to P.

(2) If Case 1, 2 or 3 applies (see paragraphs 7 to 9) a relevant defeat occurs in relation to P and each of the related arrangements.

(3) “The related arrangements” means Set A and the arrangements mentioned in sub-paragraph (1)(b).

Limit on number of separate relevant defeats in relation to the same, or related, arrangements U.K.

6 U.K. In relation to a person, if there has been a relevant defeat of arrangements (whether under paragraph 4 or 5) there cannot be a further relevant defeat of—

(a) those particular arrangements, or

(b) arrangements which are related to those arrangements.

Case 1: counteraction upheld by judicial ruling U.K.

7 (1) Case 1 applies if— U.K.

(a) any of Conditions A to E is met in relation to any of the related arrangements, and

(b) in the case of those arrangements the decision to make the relevant counteraction has been upheld by a judicial ruling (which is final).

(2) In sub-paragraph (1) “the relevant counteraction” means the counteraction mentioned in paragraph 11(d), 12(1)(b), 13(1)(d), 14(1)(d) or 15(1)(d) (as the case requires).

Case 2: judicial ruling that avoidance-related rule applies U.K.

8 U.K. Case 2 applies if Condition F is met in relation to any of the related arrangements.

Case 3: proportion-based relevant defeat U.K.

9 (1) Case 3 applies if— U.K.

(a) at least 75% of the tested arrangements have been defeated, and

(b) no final judicial ruling in relation to any of the related arrangements has upheld a corresponding tax advantage which has been asserted in connection with any of the related arrangements.

(2) In this paragraph “the tested arrangements” means so many of the related arrangements (as defined in paragraph 5(3)) as meet the condition in sub-paragraph (3) or (4).

(3) Particular arrangements meet this condition if a person has made a return, claim or election on the basis that a tax advantage results from those arrangements and—

(a) there has been an enquiry or investigation by HMRC into the return, claim or election, or

(b) HMRC assesses the person to tax on the basis that the tax advantage (or any part of it) does not arise, or

(c) a GAAR counteraction notice has been given in relation to the tax advantage or part of it and the arrangements.

(4) Particular arrangements meet this condition if HMRC takes other action on the basis that a tax advantage which might be expected to arise from those arrangements, or is asserted in connection with them, does not arise.

(5) For the purposes of this paragraph a tax advantage has been “asserted” in connection with particular arrangements if a person has made a return, claim or election on the basis that the tax advantage arises from those arrangements.

(6) In sub-paragraph (1)(b) “corresponding tax advantage” means a tax advantage corresponding to any tax advantage the counteraction of which is taken into account by HMRC for the purposes of sub-paragraph (1)(a).

(7) For the purposes of this paragraph a court or tribunal “upholds” a tax advantage if—

(a) the court or tribunal makes a ruling to the effect that no part of the tax advantage is to be counteracted, and

(b) that judicial ruling is final.

(8) In this paragraph references to “counteraction” include anything referred to as a counteraction in any of Conditions A to F in paragraphs 11 to 16.

(9) In this paragraph “GAAR counteraction notice” means—

(a) a notice such as is mentioned in sub-paragraph (2) of paragraph 12 of Schedule 43 to FA 2013 (notice of final decision to counteract),

(b) a notice under paragraph 8(2) or 9(2) of Schedule 43A to that Act (pooling or binding of arrangements) stating that the tax advantage is to be counteracted under the general anti-abuse rule, or

(c) a notice under paragraph 8(2) of Schedule 43B to that Act (generic referrals) stating that the tax advantage is to be counteracted under the general anti-abuse rule.

“Defeat” of arrangements U.K.

10 U.K. For the purposes of this Part of this Act a “defeat” of arrangements occurs if any of Conditions A to F (in paragraphs 11 to 16) is met in relation to the arrangements.

11 U.K. Condition A is that—

(a) a person has made a return, claim or election on the basis that a tax advantage arises from the arrangements,

(b) a notice given to the person under paragraph 12 of Schedule 43 to, paragraph 8(2) or 9(2) of Schedule 43A to or paragraph 8(2) of Schedule 43B to FA 2013 stated that the tax advantage was to be counteracted under the general anti-abuse rule,

(c) the tax advantage has been counteracted (in whole or in part) under the general anti-abuse rule, and

(d) the counteraction is final.

12 (1) Condition B is that a follower notice has been given to a person by reference to the arrangements (and not withdrawn) and— U.K.

(a) the person has complied with subsection (2) of section 208 of FA 2014 by taking the action specified in subsections (4) to (6) of that section in respect of the denied tax advantage (or part of it), or

(b) the denied tax advantage has been counteracted (in whole or in part) otherwise than as mentioned in paragraph (a) and the counteraction is final.

(2) In this paragraph “the denied tax advantage” is to be interpreted in accordance with section 208(3) of FA 2014.

(3) In this Schedule “follower notice” means a follower notice under Chapter 2 of Part 4 of FA 2014.

13 (1) Condition C is that— U.K.

(a) the arrangements are DOTAS arrangements,

(b) a person (“the taxpayer”) has made a return, claim or election on the basis that a relevant tax advantage arises,

(c) the relevant tax advantage has been counteracted, and

(d) the counteraction is final.

(2) For the purposes of sub-paragraph (1) “relevant tax advantage” means a tax advantage which the arrangements might be expected to enable the taxpayer to obtain.

(3) For the purposes of this paragraph the relevant tax advantage is “counteracted” if adjustments are made in respect of the taxpayer's tax position on the basis that the whole or part of that tax advantage does not arise.

14 (1) Condition D is that— U.K.

(a) the arrangements are disclosable VAT [F3 or other indirect tax] arrangements to which a F4 ... person is a party,

(b) the F5 ... person has made a return or claim on the basis that a relevant tax advantage arises,

(c) the relevant tax advantage has been counteracted, and

(d) the counteraction is final.

(2) For the purposes of sub-paragraph (1) “relevant tax advantage” means a tax advantage which the arrangements might be expected to enable the F6 ... person to obtain.

(3) For the purposes of this paragraph the relevant tax advantage is “counteracted” if adjustments are made in respect of the F7 ... person's tax position on the basis that the whole or part of that tax advantage does not arise.

Textual Amendments

F3 Words in Sch. 34A para. 14(1)(a) inserted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(3)(a)

F4 Word in Sch. 34A para. 14(1)(a) omitted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(3)(b)

F5 Word in Sch. 34A para. 14(1)(b) omitted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(3)(b)

F6 Word in Sch. 34A para. 14(2) omitted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(3)(b)

F7 Word in Sch. 34A para. 14(3) omitted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by virtue of Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(3)(b)

15 (1) Condition E is that the arrangements are disclosable VAT arrangements to which a taxable person (“T”) is a party and— U.K.

(a) the arrangements relate to the position with respect to VAT of a person other than T (“S”) who has made supplies of goods or services to T,

(b) the arrangements might be expected to enable T to obtain a tax advantage in connection with those supplies of goods or services,

(c) the arrangements have been counteracted, and

(d) the counteraction is final.

(2) For the purposes of this paragraph the arrangements are “counteracted” if—

(a) HMRC assess S to tax or take any other action on a basis which prevents T from obtaining (or obtaining the whole of) the tax advantage in question, or

(b) adjustments are made on a basis such as is mentioned in paragraph (a).

16 (1) Condition F is that— U.K.

(a) a person has made a return, claim or election on the basis that a relevant tax advantage arises,

(b) the tax advantage, or part of the tax advantage would not arise if a particular avoidance-related rule (see paragraph 25) applies in relation to the person's tax affairs,

(c) it is held in a judicial ruling that the relevant avoidance-related rule applies in relation to the person's tax affairs, and

(d) the judicial ruling is final.

(2) For the purposes of sub-paragraph (1) “relevant tax advantage” means a tax advantage which the arrangements might be expected to enable the person to obtain.

PART 3 U.K. Relevant defeats: associated persons

Attribution of relevant defeats U.K.

17 (1) Sub-paragraph (2) applies if— U.K.

(a) there is (or has been) a person (“Q”),

(b) arrangements (“the defeated arrangements”) have been entered into,

(c) an event occurs such that either—

(i) there is a relevant defeat in relation to Q and the defeated arrangements, or

(ii) the condition in sub-paragraph (i) would be met if Q had not ceased to exist,

(d) at the time of that event a person (“P”) is carrying on a business as a promoter (or is carrying on what would be such a business under the condition in paragraph 3(2)), and

(e) Condition 1 or 2 is met in relation to Q and P.

(2) The event is treated for all purposes of this Part of this Act as a relevant defeat in relation to P and the defeated arrangements (whether or not it is also a relevant defeat in relation to Q, and regardless of whether or not P existed at any time when those arrangements were promoted arrangements in relation to Q).

(3) Condition 1 is that—

(a) P is not an individual,

(b) at a time when the defeated arrangements were promoted arrangements in relation to Q—

(i) P was a relevant body controlled by Q, or

(ii) Q was a relevant body controlled by P, and

(c) at the time of the event mentioned in sub-paragraph (1)(c)—

(i) Q is a relevant body controlled by P,

(ii) P is a relevant body controlled by Q, or

(iii) P and Q are relevant bodies controlled by a third person.

(4) Condition 2 is that—

(a) P and Q are relevant bodies,

(b) at a time when the defeated arrangements were promoted arrangements in relation to Q, a third person (“C”) controlled Q, and

(c) C controls P at the time of the event mentioned in sub-paragraph (1)(c).

(5) For the purposes of sub-paragraphs (3)(b) and (4)(b), the question whether arrangements are promoted arrangements in relation to Q at any time is to be determined on the assumption that the reference to “design” in paragraph (b) of section 235(3) (definition of “promoter” in relation to relevant arrangements) is omitted.

Deemed defeat notices U.K.

18 (1) This paragraph applies if— U.K.

(a) an authorised officer becomes aware at any time (“the relevant time”) that a relevant defeat has occurred in relation to a person ( “ P ”) who is carrying on a business as a promoter,

(b) there have occurred, more than 3 years before the relevant time—

(i) one third party defeat, or

(ii) two third party defeats, and

(c) conditions A1 and B1 (in a case within paragraph (b)(i)), or conditions A2 and B2 (in a case within paragraph (b)(ii)), are met.

(2) Where this paragraph applies by virtue of sub-paragraph (1)(b)(i), this Part of this Act has effect as if an authorised officer had (with due authority), at the time of the time of the third party defeat, given P a single defeat notice under section 241A(2) in respect of it.

(3) Where this paragraph applies by virtue of sub-paragraph (1)(b)(ii), this Part of this Act has effect as if an authorised officer had (with due authority), at the time of the second of the two third party defeats, given P a double defeat notice under section 241A(3) in respect of the two third party defeats.

(4) Section 241A(8) has no effect in relation to a notice treated as given as mentioned in sub-paragraph (2) or (3).

(5) Condition A1 is that—

(a) a conduct notice or a single or double defeat notice has been given to the other person (see sub-paragraph (9)) in respect of the third party defeat,

(b) at the time of the third party defeat an authorised officer would have had power by virtue of paragraph 17 to give P a defeat notice in respect of the third party defeat, had the officer been aware that it was a relevant defeat in relation to P, and

(c) so far as the authorised officer mentioned in sub-paragraph (1)(a) is aware, the conditions for giving P a defeat notice in respect of the third party defeat have never been met (ignoring this paragraph).

(6) Condition A2 is that—

(a) a conduct notice or a single or double defeat notice has been given to the other person (see sub-paragraph (9)) in respect of each, or both, of the third party defeats,

(b) at the time of the second third party defeat an authorised officer would have had power by virtue of paragraph 17 to give P a double defeat notice in respect of the third party defeats, had the officer been aware that either of the third party defeats was a relevant defeat in relation to P, and

(c) so far as the authorised officer mentioned in sub-paragraph (1)(a) is aware, the conditions for giving P a defeat notice in respect of those third party defeats (or either of them) have never been met (ignoring this paragraph).

(7) Condition B1 is that, had an authorised officer given P a defeat notice in respect of the third party defeat at the time of that relevant defeat, that defeat notice would still have effect at the relevant time (see sub-paragraph (1)).

(8) Condition B2 is that, had an authorised officer given P a defeat notice in respect of the two third party defeats at the time of the second of those relevant defeats, that defeat notice would still have effect at the relevant time.

(9) In this paragraph “third party defeat” means a relevant defeat which has occurred in relation to a person other than P.

Meaning of “relevant body” and “control” U.K.

19 (1) In this Part of this Schedule “relevant body” means— U.K.

(a) a body corporate, or

(b) a partnership.

(2) For the purposes of this Part of this Schedule a person controls a body corporate if the person has power to secure that the affairs of the body corporate are conducted in accordance with the person's wishes—

(a) by means of the holding of shares or the possession of voting power in relation to the body corporate or any other relevant body,

(b) as a result of any powers conferred by the articles of association or other document regulating the body corporate or any other relevant body, or

(c) by means of controlling a partnership.

(3) For the purposes of this Part of this Schedule a person controls a partnership if the person is a controlling member or the managing partner of the partnership.

(4) In this paragraph “controlling member” has the same meaning as in Schedule 36 (partnerships).

(5) In this paragraph “managing partner”, in relation to a partnership, means the member of the partnership who directs, or is on a day-to-day level in control of, the management of the business of the partnership.

PART 4 U.K. Meeting section 237A conditions: bodies corporate and partnerships

[F8 Relevant bodies controlled etc by other persons treated as meeting section 237A condition U.K.

Textual Amendments

F8 Sch. 34A paras. 20-22 and cross-headings substituted (with effect in accordance with s. 24(6) of the amending Act) by Finance Act 2017 (c. 10), s. 24(3)

20 (1) A relevant body is treated as meeting a section 237A condition at the section 237A(2) relevant time if any of Conditions A to C is met. U.K.

(2) Condition A is that—

(a) a person met the section 237A condition at a time when the person was a promoter, and

(b) the person controls or has significant influence over the relevant body at the section 237A(2) relevant time.

(3) Condition B is that—

(a) a person met the section 237A condition at a time when the person controlled or had significant influence over the relevant body,

(b) the relevant body was a promoter at that time, and

(c) the person controls or has significant influence over the relevant body at the section 237A(2) relevant time.

(4) Condition C is that—

(a) two or more persons together controlled or had significant influence over the relevant body at a time when one of those persons met the section 237A condition,

(b) the relevant body was a promoter at that time, and

(c) those persons together control or have significant influence over the relevant body at the section 237A(2) relevant time.

(5) Sub-paragraph (1) does not apply where the person referred to in sub-paragraph (2)(a), (3)(a), or (4)(a) as meeting a section 237A condition is an individual.

(6) For the purposes of sub-paragraph (2) it does not matter whether the relevant body existed at the time referred to in sub-paragraph (2)(a).

Persons who control etc a relevant body treated as meeting a section 237A condition U.K.

21 (1) If at a time when a person controlled or had significant influence over a relevant body— U.K.

(a) the relevant body met a section 237A condition, and

(b) the relevant body, or another relevant body which the person controlled or had significant influence over, was a promoter,

the person is treated as meeting the section 237A condition at the section 237A(2) relevant time.

(2) It does not matter whether any relevant body referred to sub-paragraph (1) exists at the section 237A(2) relevant time.

Relevant bodies controlled etc by the same person treated as meeting a section 237A condition U.K.

22 (1) If— U.K.

(a) a person controlled or had significant influence over a relevant body at a time when it met a section 237A condition, and

(b) at that time that body, or another relevant body which the person controlled or had significant influence over, was a promoter,

any relevant body which the person controls or has significant influence over at the section 237A(2) relevant time is treated as meeting the section 237A condition at the section 237A(2) relevant time.

(2) If—

(a) two or more persons together controlled or had significant influence over a relevant body at a time when it met a section 237A condition, and

(b) at that time that body, or another relevant body which those persons together controlled or had significant influence over, was a promoter,

any relevant body which those persons together control or have significant influence over at the section 237A(2) relevant time is treated as meeting the section 237A condition at the section 237A(2) relevant time.

(3) It does not matter whether—

(a) a relevant body referred to in sub-paragraph (1)(a) or (b) or (2)(a) or (b) exists at the section 237A(2) relevant time, or

(b) a relevant body existing at the section 237A(2) relevant time existed at the time referred to in sub-paragraph (1)(a) or (2)(a).]

Interpretation U.K.

23 (1) In this Part of this Schedule— U.K.

• [F9 “control” and “significant influence” have the same meanings as in Part 4 of Schedule 34 (see paragraph 13A(5) to (11));

  references to a person being a promoter are to the person carrying on business as a promoter;]

• “relevant body” has the same meaning as in Part 3 of this Schedule;

• “section 237A(2) relevant time” means the time referred to in section 237A(2);

• “section 237A condition” means any of the conditions in section 237A(11), (12) and (13).

(2) For the purposes of paragraphs [F10 20 to 22], the condition in section 237A(11) (occurrence of 3 relevant defeats in the 3 years ending with the relevant time) is taken to have been met by a person at any time if at least 3 relevant defeats have occurred in relation to the person in the period of 3 years ending with that time.

Textual Amendments

F9 Words in Sch. 34A para. 23(1) substituted (with effect in accordance with s. 24(6) of the amending Act) by Finance Act 2017 (c. 10), s. 24(4)(a)

F10 Words in Sch. 34A para. 23(2) substituted (with effect in accordance with s. 24(6) of the amending Act) by Finance Act 2017 (c. 10), s. 24(4)(b)

PART 5 U.K. Supplementary

“Adjustments” U.K.

24 U.K. In this Schedule “adjustments” means any adjustments, whether by way of an assessment, the modification of an assessment or return, the amendment or disallowance of a claim, the entering into of a contract settlement or otherwise (and references to “making” adjustments accordingly include securing that adjustments are made by entering into a contract settlement).

Meaning of “avoidance-related rule” U.K.

25 (1) In this Schedule “avoidance-related rule” means a rule in Category 1 or 2. U.K.

(2) A rule is in Category 1 if—

(a) it refers (in whatever terms) to the purpose or main purpose or purposes of a transaction, arrangements or any other action or matter, and

(b) to whether or not the purpose in question is or involves the avoidance of tax or the obtaining of any advantage in relation to tax (however described).

(3) A rule is also in Category 1 if it refers (in whatever terms) to—

(a) expectations as to what are, or may be, the expected benefits of a transaction, arrangements or any other action or matter, and

(b) whether or not the avoidance of tax or the obtaining of any advantage in relation to tax (however described) is such a benefit.

For the purposes of paragraph (b) it does not matter whether the reference is (for instance) to the “sole or main benefit” or “one of the main benefits” or any other reference to a benefit.

(4) A rule falls within Category 2 if as a result of the rule a person may be treated differently for tax purposes depending on whether or not purposes referred to in the rule (for instance the purposes of an actual or contemplated action or enterprise) are (or are shown to be) commercial purposes.

(5) For example, a rule in the following form would fall within Category 1 and within Category 2—

“Example rule

Section X does not apply to a company in respect of a transaction if the company shows that the transaction meets Condition A or B.

Condition A is that the transaction is effected—

(a) for genuine commercial reasons, or

(b) in the ordinary course of managing investments.

Condition B is that the avoidance of tax is not the main object or one of the main objects of the transaction.”

“DOTAS arrangements” U.K.

26 (1) For the purposes of this Schedule arrangements are “DOTAS arrangements” at any time if at that time a person— U.K.

(a) has provided, information in relation to the arrangements under section 308(3), 309 or 310 of FA 2004, or

(b) has failed to comply with any of those provisions in relation to the arrangements.

(2) But for the purposes of this Schedule “DOTAS arrangements” does not include arrangements in respect of which HMRC has given notice under section 312(6) of FA 2004 (notice that promoters not under duty to notify client of reference number).

(3) For the purposes of sub-paragraph (1) a person who would be required to provide information under subsection (3) of section 308 of FA 2004—

(a) but for the fact that the arrangements implement a proposal in respect of which notice has been given under subsection (1) of that section, or

(b) but for subsection (4A), (4C) or (5) of that section,

is treated as providing the information at the end of the period referred to in subsection (3) of that section.

[F11 “Disclosable VAT or other indirect tax arrangements” U.K.

Textual Amendments

F11 Sch. 34A para. 26A and cross-heading inserted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(4)

26A (1) For the purposes of this Schedule arrangements are “disclosable VAT or other indirect tax arrangements” at any time if at that time— U.K.

(a) the arrangements are disclosable Schedule 11A arrangements, or

(b) sub-paragraph (2) applies.

(2) This sub-paragraph applies if a person—

(a) has provided information in relation to the arrangements under paragraph 12(1), 17(2) or 18(2) of Schedule 17 to FA 2017, or

(b) has failed to comply with any of those provisions in relation to the arrangements.

(3) But for the purposes of this Schedule arrangements in respect of which HMRC have given notice under paragraph 23(6) of that Schedule (notice that promoters not under duty to notify client of reference number) are not to be regarded as disclosable VAT or other indirect tax arrangements.

(4) For the purposes of sub-paragraph (2) a person who would be required to provide information under paragraph 12(1) of that Schedule—

(a) but for the fact that the arrangements implement a proposal in respect of which notice has been given under paragraph 11(1) of that Schedule, or

(b) but for paragraph 13, 14 or 15 of that Schedule,

is treated as providing the information at the end of the period referred to in paragraph 12(1).]

“Disclosable [F12 Schedule 11A] VAT arrangements” U.K.

Textual Amendments

F12 Words in Sch. 34A para. 27 cross-heading inserted (16.11.2017 for specified purposes) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(5)

27 U.K. For the purposes of [F13 paragraph 26A] arrangements are “disclosable [F14 Schedule 11A] VAT arrangements” at any time if at that time—

(a) a person has complied with paragraph 6 of Schedule 11A to VATA 1994 in relation to the arrangements (duty to notify Commissioners),

(b) a person under a duty to comply with that paragraph in relation to the arrangements has failed to do so, or

(c) a reference number has been allocated to the scheme under paragraph 9 of that Schedule (voluntary notification of avoidance scheme which is not a designated scheme).

Textual Amendments

F13 Words in Sch. 34A para. 27 substituted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(6)(a)

F14 Words in Sch. 34A para. 27 inserted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(6)(b)

Paragraphs 26 [F15 to 27]: supplementary U.K.

Textual Amendments

F15 Words in Sch. 34A para. 28 cross-heading substituted (16.11.2017 for specified purposes) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(7)

28 (1) A person “fails to comply” with any provision mentioned in paragraph 26(1)(a)[F16 , 26A(2)(a)] or 27(b) if and only if any of the conditions in sub-paragraphs (2) to (4) is met. U.K.

(2) The condition in this sub-paragraph is that—

(a) the tribunal has determined that the person has failed to comply with the provision concerned,

(b) the appeal period has ended, and

(c) the determination has not been overturned on appeal.

(3) The condition in this sub-paragraph is that—

(a) the tribunal has determined for the purposes of section 118(2) of TMA 1970 that the person is to be deemed not to have failed to comply with the provision concerned as the person had a reasonable excuse for not doing the thing required to be done,

(b) the appeal period has ended, and

(c) the determination has not been overturned on appeal.

(4) The condition in this sub-paragraph is that the person admitted in writing to HMRC that the person has failed to comply with the provision concerned.

(5) In this paragraph “the appeal period” means—

(a) the period during which an appeal could be brought against the determination of the tribunal, or

(b) where an appeal mentioned in paragraph (a) has been brought, the period during which that appeal has not been finally determined, withdrawn or otherwise disposed of.

Textual Amendments

F16 Word in Sch. 34A para. 28(1) inserted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 54(8)

“Final” counteraction U.K.

29 U.K. For the purposes of this Schedule the counteraction of a tax advantage or of arrangements is “final” when the assessment or adjustments made to effect the counteraction, and any amounts arising as a result of the assessment or adjustments, can no longer be varied, on appeal or otherwise.

Inheritance tax, stamp duty reserve tax, VAT and petroleum revenue tax U.K.

30 (1) In this Schedule, in relation to inheritance tax, each of the following is treated as a return— U.K.

(a) an account delivered by a person under section 216 or 217 of IHTA 1984 (including an account delivered in accordance with regulations under section 256 of that Act);

(b) a statement or declaration which amends or is otherwise connected with such an account produced by the person who delivered the account;

(c) information or a document provided by a person in accordance with regulations under section 256 of that Act;

and such a return is treated as made by the person in question.

(2) In this Schedule references to an assessment to tax, in relation to inheritance tax, stamp duty reserve tax and petroleum revenue tax, include a determination.

(3) In this Schedule an expression used in relation to VAT has the same meaning as in VATA 1994.

Power to amend U.K.

31 (1) The Treasury may by regulations amend this Schedule (apart from this paragraph). U.K.

(2) An amendment by virtue of sub-paragraph (1) may, in particular, add, vary or remove conditions or categories (or otherwise vary the meaning of “ avoidance-related rule ”).

(3) Regulations under sub-paragraph (1) may include any amendment of this Part of this Act that is appropriate in consequence of an amendment made by virtue of sub-paragraph (1).]