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Sometimes documents are revealing because of what they don’t say. Take the latest edition of the list of schemes notified under DOTAS (tinyurl.com/hmrctasrn), which tells us that no schemes were notified in the last quarter.
In fact there have been no notified disclosures since January 2021 and only a handful over the last few years. That is a sea change from a few years ago – in 2009-10 alone there were 116 disclosures. The avoidance landscape has changed out of all recognition. DOTAS is only one of the reasons for this, but it clearly has been a critical factor.
One of its effects has been to drive most of the remaining avoidance activity ‘underground’. Mainstream firms have moved away from schemes, and we know from recent cases that the firms still promoting avoidance schemes (almost entirely in the disguised remuneration arena) are only disclosing them when ordered to by a tribunal.
I was at the Latimer House conference in 2005 when Dave Hartnett (then HMRC director general for compliance) announced a new approach to tackling avoidance, under which HMRC would always litigate avoidance schemes no matter how slim the department’s chance of success – an approach which became known as ‘litigate or die’. His aim was to eliminate avoidance by making the economic cost of failure too high. At the time I, and most of the audience, thought that this was something of a pipe dream but, although it took longer than Mr Hartnett might have wanted, there is no doubt that his aims have been largely realised. The tax world is now a very different place.
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