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Finance Act 2014

Type Public General Act

Publication 2014-07-17

Last updated 2024-11-18

State In force

Department Statute Law Database

Source legislation.gov.uk

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(8A) Sub-paragraphs (8B) and (8C) apply where a person has been given an accelerated payment notice under Chapter 3 of Part 4 of FA 2014 and that notice has not been withdrawn. (8B) Nothing in this paragraph enables the postponement of the payment of (as the case may be)— (a) the understated tax to which the payment specified in the notice under section 220(2)(b) of that Act relates, or (b) the disputed tax specified in the notice under section 221(2)(b) of that Act. (8C) Accordingly, if the payment of an amount of tax within sub-paragraph (8B)(b) is postponed by virtue of this paragraph immediately before the accelerated payment notice is given, it ceases to be so postponed with effect from the time that notice is given, and the tax is due and payable— (a) if no representations were made under section 222 of that Act in respect of the notice, on or before the last day of the period of 90 days beginning with the day the notice is given, and (b) if representations were so made, on or before whichever is later of— (i) the last day of the 90 day period mentioned in paragraph (a), and (ii) the last day of the period of 30 days beginning with the day on which HMRC's determination in respect of those representations is notified under section 222 of that Act.

(6) In paragraph 49 of that Schedule (agreement to postpone payment of tax), after sub-paragraph (3) insert—

(4) Sub-paragraphs (8A) to (8C) of paragraph 48 apply for the purposes of this paragraph as they apply for the purposes of paragraph 48.

Protection of the revenue pending further appeals

225

(1) In section 56 of TMA 1970 (payment of tax where there is a further appeal), after subsection (3) insert—

(4) Subsection (5) applies where— (a) an accelerated payment notice or partner payment notice has been given to a party to the appeal under Chapter 3 of Part 4 of the Finance Act 2014 (and not withdrawn), and (b) the assessment has effect, or partly has effect, to counteract the whole or part of the asserted advantage (within the meaning of section 219(3) of that Act) by reason of which the notice was given. (5) If, on the application of HMRC, the relevant court or tribunal considers it necessary for the protection of the revenue, it may direct that subsection (2) does not apply so far as the tax relates to the counteraction of the whole or part of the asserted advantage, and— (a) give permission to withhold all or part of any repayment, or (b) require the provision of adequate security before repayment is made. (6) “Relevant court or tribunal” means the tribunal or court from which permission or leave to appeal is sought.

(2) In Schedule 10 to FA 2003 (SDLT: returns, enquiries, assessments and appeals), in paragraph 43 (payment of stamp duty land tax where there is a further appeal), after sub-paragraph (2) insert—

(3) Sub-paragraph (4) applies where— (a) an accelerated payment notice has been given to a party to the appeal under Chapter 3 of Part 4 of the Finance Act 2014 (and not withdrawn), and (b) the assessment to which the appeal relates has effect, or partly has effect, to counteract the whole or part of the asserted advantage (within the meaning of section 219(3) of that Act) by reason of which the notice was given. (4) If, on the application of HMRC, the relevant court or tribunal considers it necessary for the protection of the revenue, it may direct that sub-paragraph (1) does not apply so far as the stamp duty land tax relates to the counteraction of the whole or part of the asserted advantage, and— (a) give permission to withhold all or part of any repayment, or (b) require the provision of adequate security before repayment is made. (5) “Relevant court or tribunal” means the tribunal or court from which permission or leave to appeal is sought.

(3) In Schedule 33 to FA 2013 (annual tax on enveloped dwellings: returns, enquiries, assessments and appeals), in paragraph 53 (payment of tax where there is a further appeal), after sub-paragraph (2) insert—

(3) Sub-paragraph (4) applies where— (a) an accelerated payment notice has been given to a party to the appeal under Chapter 3 of Part 4 of FA 2014 (and not withdrawn), and (b) the assessment to which the appeal relates has effect, or partly has effect, to counteract the whole or part of the asserted advantage (within the meaning of section 219(3) of that Act) by reason of which the notice was given. (4) If, on the application of HMRC, the relevant court or tribunal considers it necessary for the protection of the revenue, it may direct that sub-paragraph (1) does not apply so far as the tax relates to the counteraction of the whole or part of the asserted advantage, and— (a) give permission to withhold all or part of any repayment, or (b) require the provision of adequate security before repayment is made. (5) “Relevant court or tribunal” means the tribunal or court from which permission or leave to appeal is sought.

Penalties

Penalty for failure to pay accelerated payment

226

(1) This section applies where an accelerated payment notice is given by virtue of section 219(2)(a) (notice given while tax enquiry is in progress) (and not withdrawn).

(2) If any amount of the accelerated payment is unpaid at the end of the payment period, P is liable to a penalty of 5% of that amount.

(3) If any amount of the accelerated payment is unpaid after the end of the period of 5 months beginning with the penalty day, P is liable to a penalty of 5% of that amount.

(4) If any amount of the accelerated payment is unpaid after the end of the period of 11 months beginning with the penalty day, P is liable to a penalty of 5% of that amount.

(5) “The penalty day” means the day immediately following the end of the payment period.

(6) Where section 223(6) (accelerated payment payable by instalments when it relates to inheritance tax payable by instalments) applies to require an amount of the accelerated payment to be paid before a later time than the end of the payment period, references in subsections (2) and (5) to the end of that period are to be read, in relation to that amount, as references to that later time.

(7) Paragraphs 9 to 18 (other than paragraph 11(5)) of Schedule 56 to FA 2009 (provisions which apply to penalties for failures to make payments of tax on time) apply, with any necessary modifications, to a penalty under this section in relation to a failure by P to pay an amount of the accelerated payment as they apply to a penalty under that Schedule in relation to a failure by a person to pay an amount of tax.

(8) Where an amendment to an accelerated payment notice made under section 227(7A) (amendment following tribunal determination about partnership return) increases the amount of the accelerated payment, the amount of the increase is to be ignored for the purposes of—

(a) this section, and

(b) any other enactment imposing a penalty or surcharge for non-payment or late payment of tax.

Withdrawal etc of accelerated payment notice

Withdrawal, modification or suspension of accelerated payment notice

227

(1) In this section a “Condition C requirement” means one of the requirements set out in Condition C in section 219.

(2) Where an accelerated payment notice has been given, HMRC may, at any time, by notice given to P—

(a) withdraw the notice,

(b) where the notice is given by virtue of more than one Condition C requirement being met, withdraw it to the extent it is given by virtue of one of those requirements (leaving the notice effective to the extent that it was also given by virtue of any other Condition C requirement and has not been withdrawn), ...

(d) reduce the amount specified in the accelerated payment notice under section 220(2)(d) or 221(2)(d).

(3) Where—

(a) an accelerated payment notice is given by virtue of the Condition C requirement in section 219(4)(a), and

(b) the follower notice to which it relates is withdrawn,

HMRC must withdraw the accelerated payment notice to the extent it was given by virtue of that requirement.

(4) Where—

(a) an accelerated payment notice is given by virtue of the Condition C requirement in section 219(4)(a), and

(b) the follower notice to which it relates is amended under section 216(7)(b) (cases where there is a new relevant final judicial ruling following a late appeal),

HMRC may by notice given to P make consequential amendments (whether under subsection (2)(c) or (d) or otherwise) to the accelerated payment notice.

(5) Where an accelerated payment notice is given by virtue of the Condition C requirement in section 219(4)(b), and—

(a) under section 311(8) or 311B(8) of FA 2004, HMRC withdraw the reference number allocated to the chosen arrangements, or to proposed arrangements implemented by the chosen arrangements, or

(b) HMRC give notice under section 312(6) or 312ZA(4) of FA 2004, with the result that persons are no longer under the duty in section 312(2) or (as the case may be) section 312ZA(2) of that Act in relation to the chosen arrangements,

HMRC must withdraw the accelerated payment notice, to the extent that it was given by virtue of the Condition C requirement.

(6) Subsection (7) applies where—

(a) an accelerated payment notice is withdrawn to the extent that it was given by virtue of a Condition C requirement,

(b) that requirement is the one stated in the notice for the purposes of section 220(6) or 221(5) (calculation of amount of the accelerated payment or of the denied advantage etc), and

(7) HMRC must, by notice given to P—

(a) modify the accelerated payment notice so as to state the remaining, or one of the remaining, Condition C requirements for the purposes of section 220(6) or 221(5), ...

(b) if the amount of the accelerated payment or (as the case may be) the amount of the disputed tax determined on the basis of the substituted Condition C requirement is less than the amount specified in the notice, amend that notice under subsection (2)(c) to substitute the lower amount, and

(c) if the amount of the asserted surrenderable amount is less than the amount specified in the notice, amend the notice under subsection (2)(d) to substitute the lower amount.

(7A) Where—

(a) an accelerated payment notice is given, and

(b) a section 12AA partnership return (as defined in Schedule 32) to which the notice relates is amended under section 12ABZB (7)(b) of TMA 1970 (amendment following tribunal determination),

HMRC may by notice given to P make consequential amendments to the accelerated payment notice.

(8) If a follower notice is suspended under section 216 (appeals against final rulings made out of time) for any period, an accelerated payment notice in respect of the follower notice is also suspended for that period.

(9) Accordingly, the period during which the accelerated payment notice is suspended does not count towards the periods mentioned in the following provisions—

(a) section 223;

(b) section 55(8D) of TMA 1970;

(d) paragraph 48(8C) of Schedule 33 to FA 2013.

(10) But the accelerated payment notice is not suspended under subsection (8) if it was also given by virtue of section 219(4)(b) or (c) and has not, to that extent, been withdrawn.

(11) In a case within subsection (10), subsections (6) and (7) apply as they would apply were the notice withdrawn to the extent that it was given by virtue of section 219(4)(a), except that any change made to the notice under subsection (7) has effect during the period of suspension only.

(12) Where an accelerated payment notice is withdrawn, it is to be treated as never having had effect (and any accelerated payment made in accordance with, or penalties paid by virtue of, the notice are to be repaid).

(12A) Where, as a result of an accelerated payment notice specifying an amount under section 220(2)(d) or 221(2)(d), a notice of consent by P to a claim for group relief in respect of the amount specified (or part of it) became ineffective by virtue of section 225A(3), nothing in subsection (12) operates to revive that notice.

(13) If, as a result of a modification made under subsection (2)(c) or an amendment made under subsection (7A), more than the resulting amount of the accelerated payment has already been paid by P, the excess must be repaid.

(13A) If, as a result of an amendment made under subsection (7A), an amount payable to HMRC under section 223(2) is increased, the amount of that increase must be paid before—

(a) the end of the period of 30 days beginning with the day on which notice of the amendment is given, or

(b) if later, the end the payment period (within the meaning given by section 223(5)).

(14) If the accelerated payment notice is amended under subsection (2)(d) or withdrawn—

(a) section 225A(2) and (3) (which prevents consent being given to group relief claims) cease to apply in relation to the released amount, and

(b) a claim for group relief may be made in respect of any part of the released amount within the period of 30 days after the day on which the notice is amended or withdrawn.

(15) The time limits otherwise applicable to amendment of a company tax return do not apply to the extent that it makes a claim for group relief within the time allowed by subsection (14).

(16) “The released amount” means—

(a) in a case where the accelerated payment notice is amended under subsection (2)(d), the amount represented by the reduction, and

(b) in a case where the accelerated payment notice is withdrawn, the amount specified under section 220(2)(d) or 221(2)(d).

Partners and partnerships

Accelerated partner payments

228

Schedule 32 makes provision for accelerated partner payments and modifies this Chapter in relation to partnerships.

Defined terms

Defined terms used in Chapter 3

229

In this Chapter—

“the accelerated payment” has the meaning given by section 223(2);

“accelerated payment notice” has the meaning given by section 219(1);

“arrangements” has the meaning given by section 201(4);

“the asserted advantage” has the meaning given by section 219(3);

“the chosen arrangements” has the meaning given by section 219(3), except in Schedule 32 where it has the meaning given by paragraph 3(3) of that Schedule;

“the denied advantage” has the meaning given by section 220(5), except in paragraph 4 of Schedule 32 where it has the meaning given by paragraph 4(4) of that Schedule;

“designated HMRC officer” means an officer of Revenue and Customs who has been designated by the Commissioners for the purposes of this Part;

“follower notice” has the meaning given by section 204(1);

“HMRC” means Her Majesty's Revenue and Customs;

“P” has the meaning given by section 219(1);

“partner payment notice” has the meaning given by paragraph 3 of Schedule 32;

“relevant tax” has the meaning given by section 200;

“tax advantage” has the meaning given by section 201(2);

“tax appeal” has the meaning given by section 203;

“tax enquiry” has the meaning given by section 202(2).

CHAPTER 4 — Miscellaneous and general provision

Stamp duty land tax and annual tax on enveloped dwellings

Special case: stamp duty land tax

230

(1) This section applies to modify the application of this Part in the case of—

(a) a return or claim in respect of stamp duty land tax, or

(b) a tax appeal within section 203(g), or any appeal within section 203(i) which derives from such an appeal.

(2) If two or more persons acting jointly are the purchasers in respect of the land transaction—

(a) anything required or authorised by this Part to be done in relation to P must be done in relation to all of those persons, and

(b) any liability of P in respect of an accelerated payment, or a penalty under this Part, is a joint and several liability of all of those persons.

(3) Subsection (2) is subject to subsections (4) to (8).

(4) If the land transaction was entered into by or on behalf of the members of a partnership—

(a) anything required or authorised to be done under this Part in relation to P is required or authorised to be done in relation to all the responsible partners, and

(b) any liability of P in respect of an accelerated payment, or a penalty under this Part, is a joint and several liability of the responsible partners.

(5) But nothing in subsection (4) enables—

(a) an accelerated payment to be recovered from a person who did not become a responsible partner until after the effective date of the transaction in respect of which the tax to which the accelerated payment relates is payable, or

(b) a penalty under this Part to be recovered from a person who did not become a responsible partner until after the time when the omission occurred that caused the penalty to become payable.

(6) Where the trustees of a settlement are liable to pay an accelerated payment or a penalty under this Part, the payment or penalty may be recovered (but only once) from any one or more of the responsible trustees.

(7) But nothing in subsection (6) enables a penalty to be recovered from a person who did not become a responsible trustee until after the time when the omission occurred that caused the penalty to become payable.

(8) Where a follower notice or accelerated payment notice is given to more than one person, the power conferred on P by section 207 or 222 is exercisable by each of those persons separately or by two or more of them jointly.

(9) In this section—

“the accelerated payment” has the meaning given by section 223(2);

“accelerated payment notice” has the meaning given by section 219(1);

“effective date”, in relation to a land transaction, has the meaning given by section 119 of FA 2003;

“follower notice” has the meaning given by section 204(1);

“the responsible partners”, in relation to a land transaction, has the meaning given by paragraph 6(2) of Schedule 15 to that Act;

“the responsible trustees” has the meaning given by paragraph 5(3) of Schedule 16 to that Act;

“P”—in relation to Chapter 2, has the meaning given by section 204(1);in relation to Chapter 3, has the meaning given by section 219.

Special case: annual tax on enveloped dwellings

231

(1) This section applies to modify the application of this Part in the case of—

(a) a return or claim in respect of annual tax on enveloped dwellings, or

(b) a tax appeal within section 203(h), or any appeal within section 203(i) which derives from such an appeal.

(2) If the responsible partners of a partnership are the chargeable person in relation to the tax to which the return or claim or appeal relates—

(a) anything required or authorised by this Part to be done in relation to P must be done in relation to all of those partners, and

(b) any liability of P in respect of an accelerated payment, or a penalty under this Part, is a joint and several liability of all of those persons.

(3) Where—

(a) a follower notice is given by virtue of a tax enquiry into the return or claim or the appeal, and

(b) by virtue of section 97 or 98 of FA 2013, two or more persons would have been jointly and severally liable for an additional amount of tax had the necessary corrective action been taken before the specified time for the purposes of section 208,

any liability of P in respect of a penalty under that section is a joint and several liability of all of them.

(4) Where—

(a) an accelerated payment notice is given by virtue of a tax enquiry into the return or claim or the appeal, and

(b) two or more persons would, by virtue of section 97 or 98 of FA 2013, be jointly and severally liable for the understated tax relating to the accelerated payment specified in the notice or (as the case may be) the disputed tax specified in the notice,

any liability of P in respect of the accelerated payment or a penalty under section 226 is a joint and several liability of all of them.

(5) Accordingly—

(a) where a follower notice is given in a case where subsection (3) applies, or

(b) an accelerated payment notice is given in a case to which subsection (4) applies,

HMRC must also give a copy of the notice to any other person who would be jointly and severally liable for a penalty or payment, in relation to the notice, by virtue of this section.

(6) Where a follower notice or accelerated payment notice is given to more than one person, the power conferred on P by section 207 or 222 is exercisable by each of those persons separately or by two or more of them jointly.

(7) In this section—

“the accelerated payment” has the meaning given by section 223(2);

“accelerated payment notice” has the meaning given by section 219(1);

“the chargeable person” has the same meaning as in Part 3 of FA 2013 (annual tax on enveloped dwellings);

“follower notice” has the same meaning as in Chapter 2;

“P”—in relation to Chapter 2, has the meaning given by section 204(1);in relation to Chapter 3, has the meaning given by section 219;

“the responsible partners” has the same meaning as in Part 3 of FA 2013 (annual tax on enveloped dwellings).

Extension of Part by order

Extension of this Part by order

232

(1) The Treasury may by order amend section 200 (definition of “relevant tax”) so as to extend this Part to any other tax.

(2) An order under this section may include—

(a) provision in respect of that other tax corresponding to the provision made by sections 224 and 225,

(b) consequential and supplemental provision, and

(3) For the purposes of subsection (1) or (2) an order under this section may amend this Part (other than this section) or any other enactment whenever passed or made.

(4) The power to make orders under this section is exercisable by statutory instrument.

(5) An order under this section may only be made if a draft of the instrument containing the order has been laid before and approved by a resolution of the House of Commons.

(6) In this section “tax” includes duty.

Consequential amendments

233

Schedule 33 contains consequential amendments.

PART 5 — Promoters of tax avoidance schemes

Introduction

Meaning of “relevant proposal” and “relevant arrangements”

234

(1) “Relevant proposal” means a proposal for arrangements which (if entered into) would be relevant arrangements (whether the proposal relates to a particular person or to any person who may seek to take advantage of it).

(2) Arrangements are “relevant arrangements” if—

(a) they enable, or might be expected to enable, any person to obtain a tax advantage, and

(b) the main benefit, or one of the main benefits, that might be expected to arise from the arrangements is the obtaining of that advantage.

(3) “Tax advantage” includes—

(a) relief or increased relief from tax,

(b) repayment or increased repayment of tax,

(d) avoidance of a possible assessment to tax,

(e) deferral of a payment of tax or advancement of a repayment of tax, and

(f) avoidance of an obligation to deduct or account for tax.

(4) “Arrangements” includes any agreement, scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.

Carrying on a business “as a promoter”

235

(1) A person carrying on a business in the course of which the person is, or has been, a promoter in relation to a relevant proposal or relevant arrangements carries on that business “as a promoter”.

(1A) For the purposes of this Part, a person is treated as carrying on a business as a promoter if the person is a member of a promotion structure (whether or not the person carries on a business).

Schedule 33A describes the cases in which a person is a member of a promotion structure.

(2) A person is a “promoter” in relation to a relevant proposal if the person—

(a) is to any extent responsible for the design of the proposed arrangements,

(b) makes a firm approach to another person in relation to the relevant proposal with a view to making the proposal available for implementation by that person or any other person, or

(3) A person is a “promoter” in relation to relevant arrangements if the person—

(a) is by virtue of subsection (2)(b) or (c), a promoter in relation to a relevant proposal which is implemented by the arrangements, or

(b) is responsible to any extent for the design, organisation or management of the arrangements.

(4) For the purposes of this Part a person makes a firm approach to another person in relation to a relevant proposal if—

(a) the person communicates information about the relevant proposal to the other person at a time when the proposed arrangements have been substantially designed,

(b) the communication is made with a view to that other person or any other person entering into transactions forming part of the proposed arrangements, and

(c) the information communicated includes an explanation of the tax advantage that might be expected to be obtained from the proposed arrangements.

(5) For the purposes of subsection (4) proposed arrangements have been substantially designed at any time if by that time the nature of the transactions to form them (or part of them) has been sufficiently developed for it to be reasonable to believe that a person who wished to obtain the tax advantage mentioned in subsection (4)(c) might enter into—

(a) transactions of the nature developed, or

(b) transactions not substantially different from transactions of that nature.

(6) A person is not a promoter in relation to a relevant proposal or relevant arrangements by reason of anything done in prescribed circumstances.

(7) Regulations under subsection (6) may contain provision having retrospective effect.

Meaning of “intermediary”

236

For the purposes of this Part a person (“A”) is an intermediary in relation to a relevant proposal if—

(a) A communicates information about the relevant proposal to another person in the course of a business,

(b) the communication is made with a view to that other person, or any other person, entering into transactions forming part of the proposed arrangements, and

Conduct notices

Duty to give conduct notice

237

(1) Subsections (5) to (9) apply if an authorised officer becomes aware at any time that a person ( “ P ”) who is carrying on a business as a promoter—

(a) has, in the period of 3 years ending with that time, met one or more threshold conditions, and

(b) was carrying on a business as a promoter when P met that condition.

(1A) Subsections (5) to (9) also apply if an authorised officer becomes aware at any time (“the relevant time”) that—

(a) a person has, in the period of 3 years ending with the relevant time, met one or more threshold conditions,

(b) at the relevant time another person (“P”) meets one or more of those conditions by virtue of Part 2 of Schedule 34 (meeting the threshold conditions: bodies corporate and partnerships), and

(2) Part 1 of Schedule 34 sets out the threshold conditions and describes how they are met.

(3) Part 2 of that Schedule contains provision about when a person is treated as meeting a threshold condition.

(4) See also Schedule 36 (which contains provision about the meeting of threshold conditions and other conditions by partnerships).

(5) The authorised officer must determine—

(a) in a case within subsection (1), whether or not P's meeting of the condition mentioned in subsection (1)(a) (or, if more than one condition is met, the meeting of all of those conditions, taken together) should be regarded as significant in view of the purposes of this Part, or

(b) in a case within subsection (1A), whether or not—

(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii) P's meeting of the condition (or, if more than one condition is met, the meeting of all of those conditions, taken together) as mentioned in subsection (1A)(b),

should be regarded as significant in view of those purposes.

(5A) In determining under subsection (5)(b) whether or not P's meeting of the condition (or conditions) should be regarded as significant, the authorised officer must determine whether the meeting of that condition (or those conditions taken together) by the person mentioned in subsection (1A)(a) should be regarded as significant in view of the purposes of this Part.

(5B) If the officer determines that the meeting of the condition (or those conditions) by that person should be regarded as significant, the officer must determine that P's meeting of that condition (or those conditions) should be regarded as significant.

(6) Subsection (5) does not apply if a conduct notice or a monitoring notice already has effect in relation to P.

(7) If the authorised officer determines under subsection (5)(a) that P's meeting of the condition or conditions in question should be regarded as significant, the officer must give P a conduct notice, unless subsection (8) applies.

(7A) If the authorised officer determines under subsection (5)(b) that ...—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) P's meeting of the condition or conditions as mentioned in subsection (1A)(b),

should be regarded as significant, the officer must give P a conduct notice, unless subsection (8) applies.

(8) This subsection applies if the authorised officer determines that, having regard to the extent of the impact that P's activities as a promoter are likely to have on the collection of tax, it is inappropriate to give P a conduct notice.

(8A) Where the authorised officer is required to make a determination under subsection (5), the officer must determine that the meeting of the condition (or if more than one is met, all of them) should be regarded as significant if P falls within the case described in paragraph 2 of Schedule 33A (multiple entity promoter).

(9) The authorised officer must determine under subsection (5) that the meeting of the condition (or all the conditions) ... should be regarded as significant if the condition (or any of the conditions) is in any of the following paragraphs of Schedule 34—

(a) paragraph 2 (deliberate tax defaulters);

(b) paragraph 3 (breach of Banking Code of Practice);

(d) paragraph 6 (persons charged with certain offences);

(e) paragraph 7 (opinion notice of GAAR Advisory Panel).

(10) If, as a result of subsection (1A), subsections (5) to (9) apply to a person, this does not prevent the giving of a conduct notice to the person mentioned in subsection (1A)(a).

Contents of a conduct notice

238

(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;

(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.

(h) to ensure that the recipient provides such information or documents to HMRC as are required for the purpose of monitoring whether and to what extent the recipient is complying with any of the conditions in the notice.

(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);

(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).

Section 238: supplementary

239

(1) In section 238 the following expressions are to be interpreted as follows.

(2) “Adequate” means adequate having regard to what it might be reasonable for a client or (as the case may be) an intermediary to expect; and “adequacy” is to be interpreted accordingly.

(3) A person (“C”) is a “client” of a promoter, if at any time when a conduct notice has effect, the promoter—

(a) makes a firm approach to C in relation to a relevant proposal with a view to the promoter making the proposal available for implementation by C or another person;

(b) makes a relevant proposal available for implementation by C;

(4) The recipient of a conduct notice “promotes” a relevant proposal if it—

(a) takes part in designing the proposal,

(b) makes a firm approach to a person in relation to the proposal with a view to making the proposal available for implementation by that person or another person, or

(5) The recipient of a conduct notice “promotes” relevant arrangements if it takes part in designing, organising or managing the arrangements.

Amendment or withdrawal of conduct notice

240

(1) This section applies where a conduct notice has been given to a person.

(2) An authorised officer may at any time amend the notice.

(3) An authorised officer—

(a) may withdraw the notice if the officer thinks it is not necessary for it to continue to have effect, ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) An authorised officer may (instead of amending the notice) withdraw the notice and give a new conduct notice.

Duration of conduct notice

241

(1) A conduct notice has effect from the date specified in it as its commencement date.

(2) A conduct notice ceases to have effect—

(a) at the end of the relevant period beginning with its commencement date, ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2A) But where a new conduct notice was given under section 240(4) that has a commencement date that is later than 12 months before the end of the relevant period in relation to the original notice, that new notice ceases to have effect at the end of the relevant period in relation to the original notice.

(3) A conduct notice ceases to have effect if withdrawn by an authorised officer under section 240.

(4) A conduct notice ceases to have effect in relation to a person when a monitoring notice takes effect in relation to that person.

(4A) For the purposes of subsection (2)(a), the relevant period in relation to a conduct notice is calculated in accordance with this table—

If the authorised officer is aware that the person to whom the notice is given meets	the relevant period is such period as may be notified in accordance with subsection (4B) or (4C) up to
1 ordinary condition	2 years
2 ordinary conditions	4 years
3 or more ordinary conditions	5 years
1 significant condition	3 years
1 significant condition and 1 or more other significant or ordinary conditions	5 years

Subsection (4E) makes provision for the relevant period to be extended in certain circumstances.

(4B) When an authorised officer gives a person a conduct notice the officer must notify the person of the relevant period calculated by reference to the conditions which the officer is aware the person has met at that time.

(4C) If an authorised officer becomes aware that a person in relation to whom a conduct notice has effect has met one or more conditions which were not taken into account when the relevant period was calculated at the time the notice was given, the officer may give the person a notice—

(a) stating that the relevant period has been recalculated to take account of the additional conditions, and

(b) notifying the person of —

(i) the new relevant period as recalculated in accordance with the table in subsection (4A), and

(ii) the new date at the end of which the conduct notice will cease to have effect.

(4D) For the purposes of the table in subsection (4A)—

(a) a condition is significant if it is—

(i) a threshold condition listed in section 237(9), or

(ii) a condition in section 237A(11), (12) or (13) in respect of which an authorised officer makes a determination (whether in accordance with section 237A(1) or (2) or for the purposes of this paragraph) that meeting the condition should be regarded as significant in view of the purposes of this Part, and

(b) a condition is ordinary if it is a threshold condition not listed in section 237(9).

(4E) In calculating the relevant period for the purposes of subsection (2)(a) no account is to be taken of any day on all or part of which the effect of the conduct notice in question has been suspended by an authorised officer.

(4F) Where an authorised officer suspends the effect of a conduct notice, the officer must, as soon as practicable, notify the person to whom the notice was given of the suspension.

(4G) Where an authorised officer determines that the effect of a conduct notice should be resumed, the officer must, as soon as practicable, notify the person to whom the notice was given—

(a) that its effect has been resumed,

(b) of the number of days that are not to be taken into account in calculating the relevant period in accordance with subsection (4E), and

(4H) Where a conduct notice has been given to a person and the person is subsequently given a notice under paragraph 1 of Schedule 36 of FA 2008 as it has effect as a result of section 272A (power to obtain information and documents), in calculating the relevant period for the purposes of subsection (2)(a) no account is to be taken of any day on which the person has not complied with that notice.

(4I) For the purposes of subsection (4H), a person has not complied with a notice given under that paragraph on each day—

(a) beginning with the day after the last day on which the person could have complied with the notice, and

(b) ending with the day before the day (or, if more than one, the last day) on which the person provides the information or produces the documents required by the notice.

(4J) As soon as reasonably practicable after the day mentioned in subsection (4I)(b), an authorised officer must give the person to whom the conduct notice was given notice of—

(a) the number of days that are not to be taken into account in calculating the relevant period, and

(b) of the new date at the end of which the relevant period is expected to end.

(5) See also section 237D(2) (provisional conduct notice affected by judicial ruling).

Monitoring notices: procedure and publication

Monitoring notices: duty to apply to tribunal

242

(1) If—

(a) a conduct notice has effect in relation to a person who is carrying on a business as a promoter, and

(b) an authorised officer determines that the person

(i) has failed to comply with one or more conditions in the notice, or

(ii) has provided false or misleading information or documents in relation to the notice,

the authorised officer must , within the period of 12 months beginning with the day on which the authorised officer makes the determination, apply to the tribunal for approval to give the person a monitoring notice.

(1A) Where subsection (1B) applies, an authorised officer, or an officer of Revenue and Customs with the approval of an authorised officer, may apply to the tribunal for approval to give a person (“P”) a monitoring notice.

(1B) This subsection applies where—

(a) within the period of 6 years after a conduct notice ceases to have effect in relation to P, the officer mentioned in subsection (1A) determines that P—

(i) failed to comply with one or more conditions in the notice, or

(ii) provided false or misleading information or documents in relation to the notice, and

(b) the officer could not reasonably have been expected to make the determination when the conduct notice had effect.

(1C) An application under subsection (1A) may not be made after the period of 12 months beginning with the day on which the officer makes the determination mentioned in subsection (1B)(a).

(1D) Where subsection (1E) applies, an authorised officer, or an officer of Revenue and Customs with the approval of an authorised officer, may apply to the tribunal for approval to give a person (“D”) a monitoring notice.

(1E) This subsection applies where—

(a) at any time before the end of the period of 6 years after a conduct notice ceases to have effect in relation to a person (“P”), an authorised officer determines (whether before or after the notice ceases to have effect) that P—

(i) failed to comply with one or more conditions in the notice, or

(ii) provided false or misleading information or documents in relation to the notice,

(b) before the end of that period, the authorised officer becomes aware that P has made a relevant transfer within the meaning of paragraph 5 of Schedule 33A (promotion structures) to D (whether before or after the notice ceases to have effect), and

(i) to apply to the tribunal for approval to give P a monitoring notice, or

(ii) to give P a monitoring notice following such an application,

before the relevant transfer took place.

(1F) For the purposes of an application under subsection (1D), any act or omission of P by reference to which the determination mentioned in subsection (1E)(a) was made is to be treated as an act or omission of D.

(1G) An application under subsection (1D) may not be made after the period of 12 months beginning with the day on which the officer makes the determination mentioned in subsection (1E)(a).

(2) An application under subsection (1) must include a draft of the monitoring notice.

(3) Subsection (1) does not apply if—

(a) the condition (or all the conditions) mentioned in subsection (1)(b) were imposed under subsection (3)(a), (b) or (c) of section 238, and

(b) the authorised officer considers that the failure to comply with the condition (or all the conditions, taken together) is such a minor matter that it should be disregarded for the purposes of this section.

(4) Where an authorised officer makes an application to the tribunal under subsection (1), the officer must at the same time give notice to the person to whom the application relates.

(5) The notice under subsection (4) must state which condition (or conditions) the authorised officer has determined under subsection (1)(b) that the person has failed to comply with and the reasons for that determination.

(6) At a time when a notice given under section 237A is provisional, no determination is to be made under subsection (1) in respect of the notice.

(7) If a promoter fails to comply with conditions in a conduct notice at a time when the conduct notice is provisional, nothing in subsection (6) prevents those failures from being taken into account under subsection (1) at any subsequent time when the conduct notice is not provisional.

Monitoring notices: tribunal approval

243

(1) On an application under section 242, the tribunal may approve the giving of a monitoring notice only if—

(a) the tribunal is satisfied that, in the circumstances, the authorised officer would be justified in giving the monitoring notice, and

(b) the person to whom the monitoring notice is to be given (“the affected person”) has been given a reasonable opportunity to make representations to the tribunal.

(2) The tribunal may amend the draft notice included with the application under section 242.

(3) If the representations that the affected person makes to the tribunal include a statement that in the affected person's view it was not reasonable to include the condition mentioned in section 242(1)(b) in the conduct notice, the tribunal must refuse to approve the giving of the monitoring notice if it is satisfied that it was not reasonable to include that condition (but see subsection (4)).

(4) If the representations made to the tribunal include the statement described in subsection (3) and the determination under section 242(1)(b) is a determination that there has been a failure to comply with more than one condition in the conduct notice—

(a) subsection (3) does not apply, but

(b) in deciding whether or not to approve the giving of the monitoring notice, the tribunal is to assume, in the case of any condition that the tribunal considers it was not reasonable to include in the conduct notice, that there has been no failure to comply with that condition.

Monitoring notices: content and issuing

244

(1) Where the tribunal has approved the giving of a monitoring notice, the authorised officer must give the notice to the person to whom it relates.

(2) A monitoring notice given under subsection (1) or paragraph 9 or 10 of Schedule 36 must—

(a) explain the effect of the monitoring notice and specify the date from which it takes effect;

(b) inform the recipient of the right to request the withdrawal of the monitoring notice under section 245.

(3) In addition, a monitoring notice must—

(a) if given under subsection (1), state which condition (or conditions) it has been determined the person has failed to comply with and the reasons for that determination;

(b) if given under paragraph 9 or 10 of Schedule 36, state the date of the original monitoring notice and name the partnership to which that notice was given.

(4) The date specified under subsection (2)(a) must not be earlier than the date on which the monitoring notice is given.

(5) In this Part, a person in relation to whom a monitoring notice has effect is called a “monitored promoter”.

Withdrawal of monitoring notice

245

(1) A person in relation to whom a monitoring notice has effect may, at any time after the end of the period of 12 months beginning with the end of the appeal period, request that the notice should cease to have effect.

(2) The “appeal period” means—

(a) the period during which an appeal could be brought against the approval by the tribunal of the giving of the monitoring notice, 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.

(3) A request under this section is to be made in writing to an authorised officer.

(4) Where a request is made under this section, an authorised officer must within 30 days beginning with the day on which the request is received determine either—

(a) that the monitoring notice is to cease to have effect, or

(b) that the request is to be refused.

(5) The matters to be taken into account by an authorised officer in making a determination under subsection (4) include—

(a) whether or not the person subject to the monitoring notice has, since the time when the notice took effect, engaged in behaviour of a sort that conditions included in a conduct notice in accordance with section 238(3) could be used to regulate;

(b) whether or not it appears likely that the person will in the future engage in such behaviour;

(c) the person's record of compliance, or failure to comply, with obligations imposed on it under this Part (including any obligations connected with any stop notice the person is subject to), since the time when the monitoring notice took effect.

(6) An authorised officer—

(a) may withdraw a monitoring notice if the officer thinks it is not necessary for it to continue to have effect, and

(b) in considering whether or not that is necessary, the officer must take into account the matters in paragraphs (a) to (c) of subsection (5).

(7) If the authorised officer makes a determination under subsection (4)(a), or decides to withdraw a monitoring notice under subsection (6), the officer must also determine that the person is, or is not, to be given a follow-on conduct notice.

(8) “Follow-on conduct notice” means a conduct notice taking effect immediately after the monitoring notice ceases to have effect.

(8A) For the purposes of determining whether a person should be given a follow-on conduct notice, the meeting of the condition in paragraph 12 of Schedule 34 (stop notices) by the person at a time when they are subject to a monitoring notice is to be regarded as significant by the authorised officer making the determination (see section 237(5)).

(9) Where the monitoring notice mentioned in subsection (1) is a replacement monitoring notice—

(a) in subsection (1) the reference to the end of the appeal period is to be read as a reference to whichever is the later of the end of the appeal period for the original monitoring notice and the date the replacement monitoring notice takes effect, and

(b) in subsection (5)(a) and (c) the time referred to is to be read as the time when the original monitoring notice (see paragraph 11(2) of Schedule 36) took effect.

Notification of determination under section 245

246

(1) Where an authorised officer makes a determination under section 245(4), that officer, or an officer of Revenue and Customs with that officer's approval, must notify the person who made the request of the determination.

(2) If the determination is that the monitoring notice is to cease to have effect, the notice must—

(a) specify the date from which the monitoring notice is to cease to have effect, and

(b) inform the person of the determination made under section 245(7).

(3) If the determination is that the request is to be refused, the notice must inform the person who made the request—

(a) of the reasons for the refusal, and

(b) of the right to appeal under section 247.

Appeal against refusal to withdraw monitoring notice

247

(1) A person may appeal against a refusal by an authorised officer of a request that a monitoring notice should cease to have effect.

(2) Notice of appeal must be given—

(a) in writing to the officer who gave the notice of the refusal under section 245, and

(b) within the period of 30 days beginning with the day on which notice of the refusal was given.

(3) The notice of appeal must state the grounds of appeal.

(4) On an appeal that is notified to the tribunal, the tribunal may—

(a) confirm the refusal, or

(b) direct that the monitoring notice is to cease to have effect.

(5) Subject to this section, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to an appeal under this section.

Publication by HMRC

248

(1) An authorised officer may publish the fact that a person is a monitored promoter.

(2) Publication under subsection (1) may also include the following information about the monitored promoter—

(a) its name;

(b) its business address or registered office;

(d) any other information that the authorised officer considers it appropriate to publish in order to make clear the monitored promoter's identity.

(3) The reference in subsection (2)(a) to the monitored promoter's name includes any name under which it carries on a business as a promoter and any previous name or pseudonym.

(4) Publication under subsection (1) may also include a statement of which of the conditions in a conduct notice it has been determined that the person (or, in the case of a replacement monitoring notice, the person to whom the original monitoring notice was given) has failed to comply with.

(5) Publication may not take place before the end of the appeal period (or, in the case of a replacement monitoring notice, the appeal period for the original monitoring notice).

(6) The “appeal period”, in relation to a monitoring notice, means—

(a) the period during which an appeal could be brought against the approval by the tribunal of the giving of the notice, 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.

(7) Publication under this section is to be in such manner as the authorised officer thinks fit; but see subsection (8).

(8) If an authorised officer publishes the fact that a person is a monitored promoter and the monitoring notice is withdrawn, the officer must publish the fact of the withdrawal in the same way as the officer published the fact that the person was a monitored promoter.

Publication by monitored promoter

249

(1) A person who is given a monitoring notice (“the monitored promoter”) must give the persons mentioned in subsection (6) a notice stating—

(a) that it is a monitored promoter, and

(b) which of the conditions in a conduct notice it has been determined that it (or, if the monitoring notice is a replacement monitoring notice, the person to whom that notice was given) has failed to comply with.

(2) If the monitoring notice is a replacement monitoring notice, the notice under subsection (1) must also identify the original monitoring notice.

(3) If regulations made by the Commissioners so require, the monitored promoter must publish on the internet—

(a) the information mentioned in paragraph (a) and (b) of subsection (1), and

(b) its promoter reference number (see section 250).

(4) Subsection (1) and any duty imposed under subsection (3) or (10) do not apply until the end of the period of 10 days beginning with the end of the appeal period (and also see subsection (9)).

(5) The “appeal period” means—

(a) the period during which an appeal could be brought against the approval by the tribunal of the giving of the monitoring notice, 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.

(6) The notice under subsection (1) must be given—

(a) to any person who becomes a client of the monitored promoter while the monitoring notice has effect, and

(b) (except in a case where the monitoring notice is a replacement monitoring notice) any person who is a client of the monitored promoter at the time the monitoring notice takes effect.

(7) A person (“C”) is a client of a monitored promoter at the time a monitoring notice takes effect if during the period beginning with the date the conduct notice mentioned in subsection (1)(b) takes effect and ending with that time the promoter—

(a) made a firm approach to C in relation to a relevant proposal with a view to the promoter making the proposal available for implementation by C or another person;

(b) made a relevant proposal available for implementation by C;

(8) A person becomes a client of a monitored promoter if the promoter does any of the things mentioned in paragraph (a) to (c) of subsection (7) in relation to that person.

(9) In the case of a person falling within subsection (6)(a), notice under subsection (1) may be given within the period of 10 days beginning with the day on which the person first became a client of the monitored promoter if that period would expire at a later date than the date on which notification would otherwise be required by virtue of subsection (4).

(10) A monitored promoter must also include in any prescribed publication or prescribed correspondence—

(a) the information mentioned in paragraph (a) and (b) of subsection (1), and

(b) its promoter reference number (see section 250).

(11) Notification under subsection (1), publication under subsection (3) or inclusion of the information required by subsection (10) is to be in such form and manner as is prescribed.

(12) Where the monitoring notice mentioned in subsection (1) is a replacement monitoring notice, the reference in subsection (4) to the end of the appeal period is to be read as a reference to whichever is the later of the end of the appeal period for the original monitoring notice and the date the replacement monitoring notice takes effect.

Allocation and distribution of promoter reference number

Allocation of promoter reference number

250

(1) Where a monitoring notice is given to a person (“the monitored promoter”) HMRC must as soon as practicable after the end of the appeal period—

(a) allocate the monitored promoter a reference number, and

(b) notify the relevant persons of that number.

(2) “Relevant persons” means—

(a) the monitored promoter, ...

(aa) any person who HMRC know falls within the case described in paragraph 3 of Schedule 33A by virtue of acting under the instruction or guidance of the monitored promoter, and

(b) if the monitored promoter is resident outside the United Kingdom, any person who HMRC know is an intermediary in relation to a relevant proposal of the monitored promoter.

(3) The “appeal period” means—

(a) the period during which an appeal could be brought against the approval by the tribunal of the giving of the monitoring notice, 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.

(4) The duty in subsection (1) does not apply if the monitoring notice is set aside following an appeal.

(5) A number allocated to a person under this section is referred to in this Part as a “promoter reference number”.

(6) Where the monitoring notice mentioned in subsection (1) is a replacement monitoring notice—

(a) in subsection (1) the reference to the end of the appeal period is to be read as a reference to whichever is the later of the end of the appeal period for the original monitoring notice and the date the replacement monitoring notice takes effect, and

(b) in subsection (4) the reference to the monitoring notice is to be read as a reference to the original monitoring notice.

Duty of monitored promoter to notify clients and intermediaries of number

251

(1) This section applies where a person who is a monitored promoter (“the monitored promoter”) is notified under section 250 of a promoter reference number.

(2) The monitored promoter must, within the relevant period, notify the promoter reference number to—

(a) any person who has become its client at any time in the period beginning with the day on which the monitoring notice in relation to the monitored promoter took effect and ending with the day on which the monitored promoter was notified of that number,

(b) any person who becomes its client after the end of the period mentioned in paragraph (a) but while the monitoring notice has effect,

(ca) any person who falls within the case described in paragraph 3 of Schedule 33A by virtue of acting under the instruction or guidance of the monitored promoter, and

(d) any person who the monitored promoter could reasonably be expected to know is a relevant intermediary in relation to a relevant proposal of the monitored promoter.

(3) A person (“C”) becomes a client of a monitored promoter if the promoter does any of the following in relation to C—

(a) makes a firm approach to C in relation to a relevant proposal with a view to the promoter making the proposal available for implementation by C or another person;

(b) makes a relevant proposal available for implementation by C;

(4) A person falls within this subsection if during the period beginning with the date the conduct notice took effect and ending with the date on which the monitoring notice took effect the person has entered into transactions forming part of relevant arrangements and those arrangements—

(a) enable, or are likely to enable, the person to obtain a tax advantage during the time a monitoring notice has effect, and

(b) are either relevant arrangements in relation to which the monitored promoter is or was a promoter or implement a relevant proposal in relation to which the monitored promoter was a promoter.

(5) A person is a relevant intermediary in relation to a relevant proposal of a monitored promoter if the person meets the conditions in section 236(a) to (c) (meaning of “intermediary”) at any time while the monitoring notice in relation to the monitored promoter has effect.

(6) The “relevant period” means—

(a) in the case of a person falling within subsection (2)(a), the period of 30 days beginning with the day of the notification mentioned in subsection (1),

(b) in the case of a person falling within subsection (2)(b), the period of 30 days beginning with the day on which the person first became a client in relation to the monitored promoter,

(c) in the case of a person falling within subsection (2)(c), the period of 30 days beginning with the later of the day of the notification mentioned in subsection (1) and the first day on which the monitored promoter could reasonably be expected to know that the person fell within subsection (4), and

(d) in the case of a person falling within subsection (2)(d), the period of 30 days beginning with the later of the day of the notification mentioned in subsection (1) and the first day on which the monitored promoter could reasonably be expected to know that the person was a relevant intermediary in relation to a relevant proposal of the monitored promoter.

(7) In this section “the conduct notice” means the conduct notice that the monitored promoter failed to comply with which resulted in the monitoring notice being given to the monitored promoter.

(8) Subsection (2)(c) is to be ignored in a case where the monitoring notice is a replacement monitoring notice.

Duty of those notified to notify others of promoter’s number

252

(1) In this section “notified client” means—

(a) a person who is notified of a promoter reference number under section 250 by reason of being a person falling within subsection (2)(b) of that section, and

(b) a person who is notified of a promoter reference number under section 251.

(2) A notified client must, within 30 days of being notified as described in subsection (1), provide the promoter reference number to any other person who the notified client might reasonably be expected to know has become, or is likely to have become, a client in relation to the monitored promoter concerned at a time when the monitoring notice in relation to that monitored promoter had effect.

(3) A person (“C”) becomes a client of a monitored promoter if the promoter does any of the following in relation to C—

(a) makes a firm approach to C in relation to a relevant proposal with a view to the promoter making the proposal available for implementation by C or another person;

(b) makes a relevant proposal available for implementation by C;

(4) Where the notified client is an intermediary in relation to a relevant proposal of the monitored promoter concerned, the notified client must also, within 30 days, provide the promoter reference number to—

(a) any person to whom the notified client has, since the monitoring notice in relation to the monitored promoter concerned took effect, communicated in the course of a business information about a relevant proposal of the monitored promoter, and

(b) any person who the notified client might reasonably be expected to know has, since that monitoring notice took effect, entered into, or is likely to enter into, transactions forming part of relevant arrangements in relation to which that monitored promoter is a promoter.

(4A) Where the notified client is a person who falls within the case described in paragraph 3 of Schedule 33A by virtue of acting under the instruction or guidance of the monitored promoter concerned, the notified client must also, within 30 days, provide the promoter reference number to—

(a) any person to whom the notified client has, since the monitoring notice in relation to the monitored promoter concerned took effect, communicated, for the purposes of any business (whether carried on by the notified client or not), information about a relevant proposal of the monitored promoter, and

(b) any person who the notified client might reasonably be expected to know has, since that monitoring notice took effect, entered into, or is likely to enter into, transactions forming part of relevant arrangements in relation to which that monitored promoter is a promoter.

(5) None of subsections (2), (4) or (4A) impose a duty on a notified client to notify a person of a promoter reference number if the notified client reasonably believes that the person has already been notified of the promoter reference number (whether as a result of a duty under this section or as a result of any of the other provision of this Part).

Duty of persons to notify the Commissioners

253

(1) If a person (“N”) is notified of a promoter reference number under section 250, 251 or 252, N must report the number to the Commissioners if N expects to obtain a tax advantage from relevant arrangements in relation to which the monitored promoter to whom the reference number relates (whether that is N or another person) is the promoter.

(2) A report under this section—

(a) must be made in (or, if prescribed circumstances exist, submitted with) each tax return made by N for a period that is or includes a period for which the arrangements enable N to obtain a tax advantage (whether in relation to the tax to which the return relates or another tax);

(b) if no tax return falls within paragraph (a), or in the case mentioned in subsection (3), must contain such information, and be made in such form and manner and within such time, as is prescribed.

(3) The case is that the tax return in which the report would (apart from this subsection) have been made is not submitted—

(a) by the filing date, or

(b) if there is no filing date in relation to the tax return concerned, by such other time that the tax return is required to be submitted by or under any enactment.

(4) Where N expects to obtain the tax advantage referred to in subsection (1) in respect of inheritance tax, stamp duty land tax, stamp duty reserve tax or petroleum revenue tax—

(a) subsection (2) does not apply in relation to that tax advantage, and

(b) a report under this section in respect of that tax must be in such form and manner and contain such information and be made within such time as is prescribed.

(5) Where the relevant arrangements referred to in subsection (1) give rise to N making a claim under section 261B of TCGA 1992 (treating trade loss as CGT loss) or for loss relief under Part 4 of ITA 2007 and that claim is not contained in a tax return, a report under this section must also be made in that claim.

(6) In this section “tax return” means any of the following—

(a) a return under section 8 of TMA 1970 (income tax and capital gains tax: personal return);

(b) a return under section 8A of TMA 1970 (income tax and capital gains tax: trustee's return);

(d) a company tax return under paragraph 3 of Schedule 18 to the FA 1998 (company tax return);

(da) a return under regulations made under section 105 of FA 2016 (apprenticeship levy);

(e) a return under section 159 or 160 of FA 2013 (returns and further returns for annual tax on enveloped dwellings).

Obtaining information and documents

Meaning of “monitored proposal” and “monitored arrangements”

254

(1) For the purposes of this Part a relevant proposal in relation to which a person (“P”) is a promoter is a “monitored proposal” in relation to P if any of the following dates fell on or after the date on which a monitoring notice took effect—

(a) the date on which P first made a firm approach to another person in relation to the relevant proposal;

(b) the date on which P first made the relevant proposal available for implementation by any other person;

(c) the date on which P first became aware of any transaction forming part of the proposed arrangements being entered into by any person.

(2) For the purposes of this Part relevant arrangements in relation to which a person (“P”) is a promoter are “monitored arrangements” in relation to P if—

(a) P was by virtue of section 235(2)(b) or (c) a promoter in relation to a relevant proposal which was implemented by the arrangements and any of the following fell on or after the date on which the monitoring notice took effect—

(i) the date on which P first made a firm approach to another person in relation to the relevant proposal;

(ii) the date on which P first made the relevant proposal available for implementation by any other person;

(iii) the date on which P first became aware of any transaction forming part of the proposed arrangements being entered into by any person,

(b) the date on which P first took part in designing, organising or managing the arrangements fell on or after the date on which a monitoring notice took effect, or

(c) the arrangements enable, or are likely to enable, the person who has entered into transactions forming them to obtain the tax advantage by reason of which they are relevant arrangements, at any time on or after the date on which a monitoring notice took effect.

Power to obtain information and documents

255

(1) An authorised officer, or an officer of Revenue and Customs with the approval of an authorised officer, may by notice in writing require any person (“P”) to whom this section applies—

(a) to provide information, or

(b) to produce a document,

if the information or document is reasonably required by the officer for any of the purposes in subsection (3).

(2) This section applies to—

(a) any person who is a monitored promoter, and

(b) any person who is a relevant intermediary in relation to a monitored proposal of a monitored promoter,

and in either case that monitored promoter is referred to below as “the relevant monitored promoter”.

(3) The purposes mentioned in subsection (1) are—

(a) considering the possible consequences of implementing a monitored proposal of the relevant monitored promoter for the tax position of persons implementing the proposal,

(b) checking the tax position of any person who the officer reasonably believes has implemented a monitored proposal of the relevant monitored promoter, or

(c) checking the tax position of any person who the officer reasonably believes has entered into transactions forming monitored arrangements of the relevant monitored promoter.

(4) A person is a “relevant intermediary” in relation to a monitored proposal if the person meets the conditions in section 236(a) to (c) (meaning of “intermediary”) in relation to the proposal at any time after the person has been notified of a promoter reference number of a person who is a promoter in relation to the proposal.

(5) In this section “checking” includes carrying out an investigation or enquiry of any kind.

(6) In this section “tax position”, in relation to a person, means the person's position as regards any tax, including the person's position as regards—

(a) past, present and future liability to pay any tax,

(b) penalties and other amounts that have been paid, or are or may be payable, by or to the person in connection with any tax,

(c) claims, elections, applications and notices that have been or may be made or given in connection with the person's liability to pay any tax,

(d) deductions or repayments of tax, or of sums representing tax, that the person is required to make—

(i) under PAYE regulations, or

(ii) by or under any other provision of the Taxes Acts, and

(e) the withholding by the person of another person's PAYE income (as defined in section 683 of ITEPA 2003).

(7) In this section the reference to the tax position of a person—

(a) includes the tax position of a company that has ceased to exist and an individual who has died, and

(b) is to the person's tax position at any time or in relation to any period.

(8) A notice under subsection (1) which is given for the purpose of checking the tax position of a person mentioned in subsection (3)(b) or (c) may not be given more than 4 years after the person's death.

(9) A notice under subsection (1) may specify or describe the information or documents to be provided or produced.

(10) Information or a document required as a result of a notice under subsection (1) must be provided or produced within—

(a) the period of 10 days beginning with the day on which the notice was given, or

(b) such longer period as the officer who gives the notice may direct.

Tribunal approval for certain uses of power under section 255

256

(1) An officer of Revenue and Customs may not, without the approval of the tribunal, give a notice under section 255 requiring a person (“A”) to provide information or produce a document which relates (in whole or in part) to a person who is neither A nor an undertaking in relation to which A is a parent undertaking.

(2) An officer of Revenue and Customs may apply to the tribunal for the approval required by subsection (1); and an application for approval may be made without notice.

(3) The tribunal may approve the giving of the notice only if—

(a) the application for approval is made by, or with the agreement of, an authorised officer,

(b) the tribunal is satisfied that, in the circumstances, the officer giving the notice is justified in doing so,

(c) the person to whom the notice is to be given has been informed that the information or documents referred to in the notice are required and given a reasonable opportunity to make representations to an officer of Revenue and Customs, and

(d) the tribunal has been given a summary of any representations made by that person.

(4) Where a notice is given under section 255 with the approval of the tribunal, it must state that it is given with that approval.

(5) Paragraphs (c) and (d) of subsection (3) do not apply to the extent that the tribunal is satisfied that taking the action specified in those paragraphs might prejudice the assessment or collection of tax.

(6) In subsection (1) “parent undertaking” and “undertaking” have the same meaning as in the Companies Acts (see section 1161 and 1162 of, and Schedule 7 to, the Companies Act 2006).

(7) A decision of the tribunal under this section is final (despite the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007).

Ongoing duty to provide information following HMRC notice

257

(1) An authorised officer, or an officer of Revenue and Customs with the approval of an authorised officer, may give a notice to a person (“P”) in relation to whom a monitoring notice has effect.

(2) A person to whom a notice is given under subsection (1) must provide prescribed information and produce prescribed documents relating to—

(a) all the monitored proposals and all the monitored arrangements in relation to which the person is a promoter at the time of the notice, and

(b) all the monitored proposals and all the monitored arrangements in relation to which the person becomes a promoter after that time.

(3) The duty under subsection (2)(b) does not apply in relation to any proposals or arrangements in relation to which the person first becomes a promoter after the monitoring notice ceases to have effect.

(4) A notice under subsection (1) must specify the time within which information must be provided or a document produced and different times may be specified for different cases.

Duty of person dealing with non-resident monitored promoter

258

(1) This section applies where a monitored promoter who is resident outside the United Kingdom has failed to comply with a duty under section 255 or 257 to provide information about a monitored proposal or monitored arrangements.

(2) An authorised officer, or an officer of Revenue and Customs with the approval of an authorised officer, may give a notice to a relevant person which—

(a) specifies or describes the information which the monitored promoter has failed to provide, and

(b) requires the person to provide the information.

(3) A “relevant person” means—

(a) any person who is an intermediary in relation to the monitored proposal concerned, ...

(aa) any person who falls within the case described in paragraph 3 of Schedule 33A by virtue of acting under the instruction or guidance of the monitored promoter, and

(b) any person (“A”) to whom the monitored promoter has made a firm approach in relation to the monitored proposal concerned with a view to making the proposal available for implementation by a person other than A.

(4) If an authorised officer is not aware of any person to whom a notice could be given under subsection (2) the authorised officer, or an officer of Revenue and Customs with the approval of the authorised officer, may give a notice to any person who has implemented the proposal which—

(a) specifies or describes the information which the monitored promoter has failed to provide, and

(b) requires the person to provide the information.

(5) If the duty mentioned in subsection (1) relates to monitored arrangements an authorised officer, or an officer of Revenue and Customs with the approval of an authorised officer, may give a notice to any person who has entered into any transaction forming part of the monitored arrangements concerned which—

(a) specifies or describes the information which the monitored promoter has failed to provide, and

(b) requires the person to provide the information.

(6) A notice under this section may be given only if the officer giving the notice reasonably believes that the person to whom the notice is given is able to provide the information requested.

(7) Information required as a result of a notice under this section must be provided within—

(a) the period of 10 days beginning with the day on which the notice was given, or

(b) such longer period as the officer who gives the notice may direct.

Monitored promoters: duty to provide information about clients

259

(1) An authorised officer, or an officer of Revenue and Customs with the approval of an authorised officer, may give notice to a person in relation to whom a monitoring notice has effect (“the monitored promoter”).

(2) A person to whom a notice is given under subsection (1) must, for each relevant period, give the officer who gave the notice the information set out in subsection (9) in respect of each person who was its client with reference to that relevant period (see subsections (5) to (8)).

(3) Each of the following is a “relevant period”—

(a) the calendar quarter in which the notice under subsection (1) was given but not including any time before the monitoring notice takes effect,

(b) the period (if any) beginning with the date the monitoring notice takes effect and ending immediately before the beginning of the period described in paragraph (a), and

(c) each calendar quarter after the period described in paragraph (a) but not including any time after the monitoring notice ceases to have effect.

(4) Information required as a result of a notice under subsection (1) must be given—

(a) within the period of 30 days beginning with the end of the relevant period concerned, or

(b) in the case of a relevant period within subsection (3)(b), within the period of 30 days beginning with the day on which the notice under subsection (1) was given if that period would expire at a later time than the period given by paragraph (a).

(5) A person (“C”) is a client of the monitored promoter with reference to a relevant period if—

(a) the promoter did any of the things mentioned in subsection (6) in relation to C at any time during that period, or

(b) the person falls within subsection (7).

(6) Those things are that the monitored promoter—

(a) made a firm approach to C in relation to a relevant proposal with a view to the promoter making the proposal available for implementation by C or another person;

(b) made a relevant proposal available for implementation by C;

(7) A person falls within this subsection if the person has entered into transactions forming part of relevant arrangements and those arrangements—

(a) enable the person to obtain a tax advantage either in that relevant period or a later relevant period, and

(b) are either relevant arrangements in relation to which the monitored promoter is or was a promoter, or implement a relevant proposal in relation to which the monitored promoter was a promoter.

(8) But a person is not a client of the monitored promoter with reference to a relevant period if—

(a) the person has previously been a client of the monitored promoter with reference to a different relevant period,

(b) the promoter complied with the duty in subsection (2) in respect of the person for that relevant period, and

(9) The information mentioned in subsection (2) is—

(a) the person's name and address, and

(b) such other information about the person as may be prescribed.

(10) Where the monitoring notice mentioned in subsection (1) is a replacement monitoring notice, subsection (5)(b) does not impose a duty on the monitored promoter concerned to provide information about a person who has entered into transactions forming part of relevant arrangements (as described in subsection (7)) if the monitored promoter reasonably believes that information about that person has, in relation to those arrangements, already been provided under the original monitoring notice.

Intermediaries: duty to provide information about clients

260

(1) An authorised officer, or an officer of Revenue and Customs with the approval of an authorised officer, may give notice to

(a) a person (“the intermediary”) who is an intermediary in relation to a relevant proposal which is a monitored proposal of a person in relation to whom a monitoring notice has effect (“the monitored promoter”);

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