A costly burden

THE DUTY TO disclose tax planning strategies under FA 2004 Part VII has been greatly extended by virtue of new regulations which have effect from 1 August 2006. (See the Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) Regulations SI 2006 No 1543) referred to in this article as the 'Prescribed Descriptions Regulations 2006' and the Tax Avoidance Schemes (Information) (Amendments) Regulations 2006 referred to in this article as the 'Information Regulations 2006'). HMRC have presented the rules as affecting only a minority of tax advisers. They will in fact impose substantial additional costs on virtually all tax advisers. In order to demonstrate why this is the case this article considers an example of routine tax planning advice of a type which cannot be within the ostensible target of the disclosure rules but which is disclosable under those rules.

The governing legislation

The key concept of the disclosure rules...