Six-year late DOTAS disclosure merits penalty

The taxpayer was an umbrella company providing PAYE payroll services in respect of individuals whose personal services were made available by recruitment agencies to end users.

HMRC considered that the company was a promoter of notifiable arrangements. In essence the company operated a contractor loan scheme which sought to avoid income tax and National Insurance by treating a portion of the payments made to the employees as a loan – here called the ‘ILO bonus’ - rather than as income. It said as a promoter the company should have provided HMRC with the prescribed information (FA 2004 s 308(3) in relation to the arrangements. The time limit to do this was 14 April 2016 but the company failed to file the details until 16 May 2022. HMRC said it had no reasonable excuse for this delay and applied to the First-tier Tribunal to impose a penalty.

The...