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Finance (No. 2) Act 2017

Type Public General Act

Publication 2017-11-16

Last updated 2025-03-20

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(2E) For the purposes of sub-paragraph (2D), disregard variations that do not substantively alter the basis of the adjustment or assessment in question.

(3) For the purposes of this paragraph the “required number or percentage of relevant defeats” is reached when HMRC reasonably believe that —

(a) the number of related arrangements implementing the proposal is fewer than 21 and defeats have been incurred in the case of 50% or more of those arrangements;

(b) the number of related arrangements implementing the proposal is more than 20 but fewer than 44 and defeats have been incurred in the case of 11 or more of those arrangements;

(c) the number of related arrangements implementing the proposal is more than 43 but fewer than 200 and defeats have been incurred in the case of 25% or more of those arrangements;

(d) the number of related arrangements implementing the proposal is 200 or more and defeats have been incurred in the case of 50 or more of those arrangements.

(4) Sub-paragraph (2) does not apply in relation to a penalty if the person liable to the penalty requests assessment of the penalty sooner than the time allowed by sub-paragraph (2).

Time limit for assessment

22

(1) An assessment of a person as liable to a penalty under paragraph 1 may not take place after the relevant time.

(2) In this paragraph “the relevant time” means, subject to sub-paragraphs (3) to (6)—

(a) where a GAAR final decision notice within the meaning of paragraph 24(1) has been given in relation to the arrangements to which the penalty relates, the end of 12 months beginning with the date on which T incurs the defeat mentioned in paragraph 1;

(b) where a notice under paragraph 25 has been given to the person mentioned in sub-paragraph (1) above in respect of the arrangements to which the penalty relates, the end of 12 months beginning with the end of the time allowed for making representations in respect of that notice;

(i) a referral has been made under paragraph 26 in respect of the arrangements to which the penalty relates, and

(ii) paragraph (d) does not apply,

the end of 12 months beginning with the date on which the opinion of the GAAR Advisory Panel is given on the referral (within the meaning given by paragraph 34(6));

(d) where a notice under paragraph 35 has been given to the person mentioned in sub-paragraph (1) above in respect of the arrangements to which the penalty relates, the end of 12 months beginning with the end of the time allowed for making representations in respect of that notice.

(3) Where—

(a) paragraph 21 prevented a penalty from being assessed before condition 1 or condition 2 was met, and

(b) condition 1 or condition 2 has been met,

the relevant time in relation to that penalty is whichever is the later of—

(i) the relevant time given by sub-paragraph (2), and

(ii) the end of 12 months beginning with the date on which the first of condition 1 or condition 2 was met.

(4) Where under paragraph 21(4) a person requests assessment of a penalty, the relevant time in relation to that penalty is whichever is the later of—

(a) the relevant time given by sub-paragraph (2), and

(b) the end of 12 months beginning with the date on which the request is made,

and sub-paragraph (3) does not apply to the penalty even if condition 1 or condition 2 is met.

(5) Sub-paragraph (6) applies where—

(a) at any time a declaration has been made under paragraph 44 for the purposes of any determination of whether a person is liable to a penalty under paragraph 1 in relation to particular arrangements (“the arrangements concerned”), and

(b) subsequently, facts that in the Commissioners' opinion are sufficient to indicate that the declaration contains a material inaccuracy have come to the Commissioners' knowledge.

(6) The relevant time in respect of any penalty under paragraph 1 payable by that person in relation to the arrangements concerned is whichever is the later of—

(a) the relevant time given by the preceding provisions of this paragraph, and

(b) the end of 12 months beginning with the date on which such facts came to the Commissioners' knowledge.

PART 7 — GAAR Advisory Panel opinion, and representations

Requirement for opinion of GAAR Advisory Panel

23

(1) A penalty under paragraph 1 may not be assessed unless—

(a) the decision that it should be assessed is taken by a designated HMRC officer, and

(b) either the condition in sub-paragraph (2) or the condition in sub-paragraph (3) is met.

(2) The condition in this sub-paragraph is that, when the assessment is made—

(a) a GAAR final decision notice has been given in relation to—

(i) the arrangements to which the penalty relates (“the relevant arrangements”), or

(ii) arrangements that are equivalent to the relevant arrangements,

(b) where a notice is required by paragraph 25 to be given to the person liable to the penalty, that notice has been given and the time allowed for making representations under that paragraph has expired, and

(i) the opinion of the GAAR Advisory Panel which was considered by HMRC in preparing that GAAR final decision notice, and

(ii) any representations made under paragraph 25.

(3) The condition in this sub-paragraph is that, when the assessment is made—

(a) an opinion of the GAAR Advisory Panel which applies to the relevant arrangements has been given on a referral under paragraph 26,

(b) where a notice is required by paragraph 35 to be given to the person liable to the penalty, that notice has been given and the time allowed for making representations under that paragraph has expired, and

(i) that opinion of the GAAR Advisory Panel, and

(ii) any representations made under paragraph 35.

(4) Where a notification of a penalty under paragraph 1 is given, the notification must be accompanied by a report prepared by HMRC of—

(a) if the condition in sub-paragraph (2) is met, the opinion of the GAAR Advisory Panel which was considered by HMRC in preparing the GAAR final decision notice;

(b) if the condition in sub-paragraph (3) is met, the opinion of the GAAR advisory panel mentioned in that sub-paragraph.

(5) Paragraph 24 contains definitions of terms used in this paragraph.

24

(1) In this Schedule a “GAAR final decision notice” means a notice under—

(a) paragraph 12 of Schedule 43 to FA 2013 (notice of final decision after considering opinion of GAAR Advisory Panel on referral under Schedule 43),

(b) paragraph 8 or 9 of Schedule 43A to FA 2013 (notice of final decision after considering opinion of GAAR Advisory Panel), or

(c) paragraph 8 of Schedule 43B to FA 2013 (notice of final decision after considering opinion of GAAR Advisory Panel on referral under Schedule 43B).

(2) For the purposes of this Part of this Schedule, where the GAAR Advisory Panel gives an opinion on a referral under paragraph 26 the arrangements to which the opinion “applies” are—

(a) the arrangements in respect of which the referral was made (that is, “the arrangements in question” within the meaning given by paragraph 26(1)), and

(b) any arrangements that are equivalent to those arrangements.

(3) For the purposes of this Part of this Schedule, arrangements are “equivalent” to one another if they are substantially the same as one another having regard to—

(a) their substantive results or intended substantive results,

(b) the means of achieving those results, and

(c) the characteristics on the basis of which it could reasonably be argued, in each case, that the arrangements are abusive tax arrangements.

Notice where Panel opinion already obtained in relation to equivalent arrangements

25

(1) This paragraph applies where a designated HMRC officer is of the view that—

(a) a person is liable to a penalty under paragraph 1 in relation to particular arrangements (“the arrangements concerned”),

(b) no GAAR final decision notice has been given in relation to those arrangements, but those arrangements are equivalent to arrangements in relation to which a GAAR final decision notice has been given (“the GAAR decision arrangements”), and

(c) accordingly, the opinion of the GAAR Advisory Panel which was considered by HMRC in preparing that GAAR final decision notice is relevant to the arrangements concerned.

(2) A designated HMRC officer must give the person mentioned in sub-paragraph (1) a notice in writing—

(a) explaining that the officer is of the view mentioned there,

(b) specifying the arrangements concerned,

(d) setting out a report prepared by HMRC of the opinion of the GAAR Advisory Panel which was considered by HMRC in preparing the GAAR final decision notice, and

(e) explaining the effect of sub-paragraphs (3) and (4).

(3) A person to whom a notice under this paragraph is given has 30 days, beginning with the day on which the notice is given, to send to the designated HMRC officer (in writing) any representations that that person wishes to make as to why the arrangements concerned are not equivalent to the GAAR decision arrangements.

(4) A designated HMRC officer may, on a written request by that person, extend the period during which representations may be made by that person.

(5) Paragraph 24 contains definitions of the following terms used in this paragraph—

“GAAR final decision notice”;

“equivalent”, in relation to arrangements.

Referral to GAAR Advisory Panel

26

(1) A designated HMRC officer may make a referral under this paragraph if—

(a) the officer considers that a person is liable to a penalty under paragraph 1 in relation to particular arrangements (“the arrangements in question”), and

(b) the requirements of paragraph 28 (procedure before making of referral) have been complied with.

(2) But a referral may not be made under this paragraph if a GAAR final decision notice (within the meaning of paragraph 24(1)) has already been given in relation to—

(a) the arrangements in question, or

(b) arrangements that are equivalent to those arrangements.

(3) A referral under this paragraph is a referral to the GAAR Advisory Panel of the question whether the entering into and carrying out of tax arrangements such as are described in the referral statement (see paragraph 27) is a reasonable course of action in relation to the relevant tax provisions.

27

(1) In this Part of this Schedule “the referral statement”, in relation to a referral under paragraph 26, means a statement made by a designated HMRC officer which—

(a) accompanies the referral,

(b) is a general statement of the material characteristics of the arrangements in question (within the meaning given by paragraph 26(1)), and

(2) A statement under this paragraph must—

(a) contain a factual description of the arrangements in question,

(b) set out HMRC's view as to whether those arrangements accord with established practice (as it stood when those arrangements were entered into),

(c) explain why it is the designated HMRC officer's view that a tax advantage of the nature described in the statement and arising from tax arrangements having the characteristics described in the statement would be a tax advantage arising from arrangements that are abusive,

(d) set out any matters the designated HMRC officer is aware of which may suggest that any view of HMRC or the designated HMRC officer expressed in the statement is not correct, and

(e) set out any other matters which the designated HMRC officer considers are required for the purposes of the exercise of the GAAR Advisory Panel's functions under paragraphs 33 and 34.

Notice before decision whether to refer

28

(1) A referral must not be made under paragraph 26 unless—

(a) a designated HMRC officer has given each relevant person a notice under this paragraph,

(b) in the case of each relevant person, the time allowed for making representations has expired, and

(c) in deciding whether to make the referral, a designated HMRC officer has considered any representations made by a relevant person within the time allowed.

(2) In this paragraph a “relevant person” means any person who at the time of the referral is considered by the officer making the referral to be liable to a penalty under paragraph 1 in relation to the arrangements in question (within the meaning given by paragraph 26(1)).

(3) A notice under this paragraph is a notice in writing which—

(a) explains that the officer giving the notice considers that the person to whom the notice is given is liable to a penalty under paragraph 1 in relation to the arrangements in question (specifying those arrangements),

(b) explains why the officer considers those arrangements to be abusive tax arrangements,

(c) explains that HMRC are proposing to make a referral under paragraph 26 of the question whether the entering into and carrying out of tax arrangements that have the characteristics of the arrangements in question is a reasonable course of action in relation to the relevant tax provisions, and

(d) explains the effect of sub-paragraphs (4) and (5).

(4) Each person to whom a notice under this paragraph is given has 45 days, beginning with the day on which the notice is given to that person, to send written representations to the designated HMRC officer in response to the notice.

(5) A designated HMRC officer may, on a written request by a person to whom a notice is given, extend the period during which representations may be made by that person.

Notice of decision whether to refer

29

Where a designated HMRC officer decides whether to make a referral under paragraph 26, the officer must, as soon as reasonably practicable, give written notice of that decision to each person to whom notice under paragraph 28 was given.

Information to accompany referral

30

A referral under paragraph 26 must (as well as being accompanied by the referral statement under paragraph 27) be accompanied by—

(a) a declaration that, as far as HMRC are aware, nothing which is material to the GAAR Advisory Panel's consideration of the matter has been omitted from that statement,

(b) a copy of each notice given under paragraph 28 by HMRC in relation to the referral,

(c) a copy of any representations received under paragraph 28 and any comments that HMRC wish to make in respect of those representations, and

(d) a copy of each notice given under paragraph 31 by HMRC.

Notice on making of referral

31

(1) Where a referral is made under paragraph 26, a designated HMRC officer must at the same time give to each relevant person a notice in writing which—

(a) notifies the person of the referral,

(b) is accompanied by a copy of the referral statement,

(c) is accompanied by a copy of any comments provided to the GAAR Advisory Panel under paragraph 30(c) in respect of representations made by the person,

(d) notifies the person of the period under paragraph 32 for making representations, and

(e) notifies the person of the requirement under that paragraph to send any representations to the officer.

(2) In this paragraph “relevant person” has the same meaning as in paragraph 28 (see sub-paragraph (2) of that paragraph).

Right to make representations to GAAR Advisory Panel

32

(1) A person who has received a notice under paragraph 31 has 21 days, beginning with the day on which that notice is given, to send to the GAAR Advisory Panel written representations about—

(a) the notice given to the person under paragraph 28, or

(b) any comments provided to the GAAR Advisory Panel under paragraph 30(c) in respect of representations made by the person.

(2) The GAAR Advisory Panel may, on a written request made by the person, extend the period during which representations may be made.

(3) If a person sends representations to the GAAR Advisory Panel under this paragraph, the person must at the same time send a copy of the representations to the designated HMRC officer.

(4) If a person sends representations to the GAAR Advisory Panel under this paragraph and that person made no representations under paragraph 28, a designated HMRC officer—

(a) may provide the GAAR Advisory Panel with comments on that person's representations under this paragraph, and

(b) if such comments are provided, must at the same time send a copy of them to that person.

Decision of GAAR Advisory Panel and opinion notices

33

(1) Where a referral is made to the GAAR Advisory Panel under paragraph 26, the Chair must arrange for a sub-panel consisting of 3 members of the GAAR Advisory Panel (one of whom may be the Chair) to consider it.

(2) The sub-panel may invite—

(a) any person to whom notice under paragraph 28 was given, or

(b) the designated HMRC officer,

(or both) to supply the sub-panel with further information within a period specified in the invitation.

(3) Invitations must explain the effect of sub-paragraph (4) or (5) (as appropriate).

(4) If a person invited under sub-paragraph (2)(a) supplies information to the sub-panel under this paragraph, that person must at the same time send a copy of the information to the designated HMRC officer.

(5) If a designated HMRC officer supplies information to the sub-panel under this paragraph, the officer must at the same time send a copy of the information to each person to whom notice under paragraph 28 was given.

34

(1) The sub-panel must produce—

(a) one opinion notice stating the joint opinion of all the members of the sub-panel, or

(b) two or three opinion notices which taken together state the opinions of all the members.

(2) The sub-panel must give a copy of the opinion notice or notices to the designated HMRC officer.

(3) An opinion notice is a notice which states that in the opinion of the members of the sub-panel, or one or more of those members—

(a) the entering into and carrying out of tax arrangements such as are described in the referral statement is a reasonable course of action in relation to the relevant tax provisions,

(b) the entering into or carrying out of such tax arrangements is not a reasonable course of action in relation to the relevant tax provisions, or

and the reasons for that opinion.

(4) In forming their opinions for the purposes of sub-paragraph (3) members of the sub-panel must—

(a) have regard to all the matters set out in the referral statement,

(b) have regard to the matters mentioned in paragraphs (a) to (c) of paragraph 3(3) and paragraph 3(4), and

(5) For the purposes of the giving of an opinion under this paragraph, the arrangements are to be assumed to be tax arrangements.

(6) For the purposes of this Schedule—

(a) an opinion of the GAAR Advisory Panel is to be treated as having been given on a referral under paragraph 26 when an opinion notice (or notices) has been given under this paragraph in respect of the referral, and

(b) any requirement to consider the opinion of the GAAR Advisory Panel given on such a referral is a requirement to consider the contents of the opinion notice (or notices) given on the referral.

Notice before deciding that arrangements are ones to which Panel opinion applies

35

(1) This paragraph applies where—

(a) an opinion of the GAAR Advisory Panel has been given on a referral under paragraph 26,

(b) a designated HMRC officer is of the view that a person is liable to a penalty under paragraph 1 in relation to particular arrangements (“the arrangements concerned”) and that that opinion of the GAAR Advisory Panel applies to those arrangements, and

(2) A designated HMRC officer must give the person mentioned in sub-paragraph (1)(b) a notice in writing—

(a) explaining that the officer is of the view mentioned in that paragraph,

(b) specifying the arrangements concerned,

(d) explaining the effect of sub-paragraphs (3) and (4).

(3) A person to whom a notice under this paragraph is given has 30 days, beginning with the day on which the notice is given, to send the designated HMRC officer (in writing) any representations as to why the opinion does not apply to the arrangements concerned.

(4) A designated HMRC officer may, on a written request by that person, extend the period during which representations may be made by that person.

(5) Paragraph 24(2) defines the arrangements that an opinion given on a referral under paragraph 26 “applies to”.

Requirement for court or tribunal to take Panel opinion into account

36

(1) In this paragraph “enabler penalty proceedings” means proceedings before a court or tribunal in connection with a penalty under paragraph 1.

(2) In determining in enabler penalty proceedings any question whether tax arrangements to which the penalty relates were abusive, the court or tribunal—

(a) must take into account the relevant Panel opinion, and

(b) may also take into account any matter mentioned in sub-paragraph (4).

(3) In sub-paragraph (2)(a) “the relevant Panel opinion” means the opinion of the GAAR Advisory Panel which under this Part of this Schedule was required to be considered by a designated HMRC officer in deciding whether the penalty should be assessed.

(4) The matters mentioned in sub-paragraph (2)(b) are—

(a) guidance, statements or other material (whether of HMRC, a Minister of the Crown or anyone else) that was in the public domain at the time the arrangements were entered into, and

(b) evidence of established practice at that time.

PART 8 — Appeals

37

A person may appeal against—

(a) a decision of HMRC that a penalty under paragraph 1 is payable by that person, or

(b) a decision of HMRC as to the amount of a penalty under paragraph 1 payable by the person.

38

(1) An appeal under paragraph 37 is to be treated in the same way as an appeal against an assessment to the tax to which the arrangements concerned relate (including by the application of any provision about bringing the appeal by notice to HMRC, about HMRC review of the decision or about determination of the appeal by the First-tier Tribunal or Upper Tribunal).

(2) Sub-paragraph (1) does not apply—

(a) so as to require a person to pay a penalty under paragraph 1 before an appeal against the assessment of the penalty is determined;

(b) in respect of any other matter expressly provided for by this Schedule.

(3) In this paragraph “the arrangements concerned” means the arrangements to which the penalty relates.

39

(1) On an appeal under paragraph 37(a) that is notified to the tribunal, the tribunal may affirm or cancel HMRC's decision.

(2) On an appeal under paragraph 37(b) that is notified to the tribunal, the tribunal may—

(a) affirm HMRC's decision, or

(b) substitute for that decision another decision that HMRC had power to make.

(3) If the tribunal substitutes its decision for HMRC's, the tribunal may rely on paragraph 18—

(a) to the same extent as HMRC (which may mean applying the same percentage reduction as HMRC to a different starting point), or

(b) to a different extent, but only if the tribunal thinks that HMRC's decision in respect of the application of paragraph 18 was flawed.

(4) In sub-paragraph (3)(b) “flawed” means flawed when considered in the light of the principles applicable in proceedings for judicial review.

(5) In this paragraph “tribunal” means the First-tier Tribunal or Upper Tribunal (as appropriate by virtue of paragraph 38(1)).

PART 9 — Information

Information and inspection powers: application of Schedule 36 to FA 2008

40

(1) Schedule 36 to FA 2008 (information and inspection powers) applies for the purpose of—

(a) checking a relevant person's position as regards liability for a penalty under paragraph 1 in relation to particular tax arrangements;

(b) ascertaining the identity of any other person who has or may have enabled those arrangements,

as it applies for the purpose of checking a person's tax position, subject to the modifications in paragraphs 41 to 43.

(2) In this paragraph and paragraphs 41 to 43—

“relevant person” means a person an officer of Revenue and Customs has reason to suspect is or may be liable to a penalty under paragraph 1 (or will become or may become so liable if T incurs a defeat);

“the Schedule” means Schedule 36 to FA 2008.

(3) References in this paragraph and paragraphs 41 and 42 to a person who has or may have enabled particular tax arrangements are to be read in accordance with Part 4 of this Schedule (persons who “enabled” the arrangements), save that—

(a) references in that Part to the arrangements mentioned in paragraph 1 (however expressed) are to be read as references to the particular tax arrangements, and

(b) references in that Part to “T” are to be read as references to the person who entered into the particular tax arrangements.

General modifications of Schedule 36 to FA 2008 as applied

41

In its application for a purpose mentioned in paragraph 40(1) above, the Schedule has effect as if—

(a) any provisions which can have no application for that purpose were omitted,

(b) references to “the taxpayer” were references to the relevant person whose position as regards liability for a penalty under paragraph 1 is to be checked, and references to “a taxpayer” were references to a relevant person,

(c) references to a person's “tax position” were to the relevant person's position as regards liability for a penalty under paragraph 1,

(d) references to prejudice to the assessment or collection of tax included prejudice to —

(i) the investigation of the relevant person's position as regards liability for a penalty under paragraph 1 in relation to particular tax arrangements, or (as the case may be)

(ii) the identification of any other person who has or may have enabled those arrangements, and

(e) references to a pending appeal relating to tax were to a pending appeal relating to an assessment of liability for a penalty under paragraph 1.

Specific modifications of Schedule 36 to FA 2008 as applied

42

(1) The Schedule as it applies for a purpose mentioned in paragraph 40(1) above has effect with the modifications in sub-paragraphs (1A) to (6).

(1A) Paragraph 1 (taxpayer notices) has effect as if the reference to checking the taxpayer's tax position (as modified by paragraph 41 of this Schedule) included a reference to ascertaining the identity of any other person who has or may have enabled the particular tax arrangements in relation to which the relevant person's position as regards liability to a penalty under paragraph 1 is to be checked.

(1B) Paragraph 10 (power to inspect business premises etc) has effect as if the reference to checking that person's tax position (as modified by paragraph 41 of this Schedule) included a reference to ascertaining the identity of any other person who has or may have enabled the particular tax arrangements in relation to which the relevant person's position as regards liability to a penalty under paragraph 1 is to be checked.

(2) Paragraph 10A (power to inspect business premises of involved third parties) has effect as if the reference in sub-paragraph (1) to the position of any person or class of persons as regards a relevant tax were to the position of a relevant person as regards liability for a penalty under paragraph 1.

(2A) Paragraph 25 (tax advisers) is treated as omitted.

(3) Paragraph 47 (right to appeal against penalties under the Schedule) has effect as if after paragraph (b) (but not as part of that paragraph) there were inserted the words “but paragraph (b) does not give a right of appeal against the amount of an increased daily penalty payable by virtue of paragraph 49A.

(4) Paragraph 49A (increased daily default penalty) has effect as if—

(a) in sub-paragraphs (1)(c) and (2) for “imposed” there were substituted “ assessable ”;

(b) for sub-paragraphs (3) and (4) there were substituted—

(3) If the tribunal decides that an increased daily penalty should be assessable— (a) the tribunal must determine the day from which the increased daily penalty is to apply and the maximum amount of that penalty (“the new maximum amount”); (b) from that day, paragraph 40 has effect in the person's case as if “the new maximum amount” were substituted for “£60”. (4) The new maximum amount may not be more than £1,000.

;

(5) Paragraph 49B (notification of increased daily default penalty) has effect as if—

(a) in sub-paragraph (1) for “a person becomes liable to a penalty” there were substituted “ the tribunal makes a determination ”;

(b) in sub-paragraph (2) for “the day from which the increased penalty is to apply” there were substituted “ the new maximum amount and the day from which it applies ”;

(6) Paragraph 49C is treated as omitted.

43

Paragraphs 50 and 51 are excluded from the application of the Schedule for a purpose mentioned in paragraph 40(1) above.

Declarations about contents of legally privileged communications

44

(1) Subject to sub-paragraph (5), a declaration under this paragraph is to be treated by—

(a) HMRC, or

(b) in any proceedings before a court or tribunal in connection with a penalty under paragraph 1, the court or tribunal,

as conclusive evidence of the things stated in the declaration.

(2) A declaration under this paragraph is a declaration which—

(a) is made by a relevant lawyer,

(b) relates to one or more communications falling within sub-paragraph (3), and

(3) A communication falls within this sub-paragraph if—

(a) it was made by a relevant lawyer (whether or not the one making the declaration),

(b) it is legally privileged, and

(c) if it were not legally privileged, it would be relied on by a person for the purpose of establishing that that person is not liable to a penalty under paragraph 1 (whether or not that person is the person who made the communication or is making the declaration).

(4) The Treasury may by regulations impose requirements as to the form and contents of declarations under this paragraph.

(5) Sub-paragraph (1) does not apply where HMRC or (as the case may be) the court or tribunal is satisfied that the declaration contains information which is incorrect.

(6) In this paragraph “a relevant lawyer” means a barrister, advocate, solicitor or other legal representative communications with whom may be the subject of a claim to legal professional privilege or, in Scotland, protected from disclosure in legal proceedings on the grounds of confidentiality of communication.

(7) For the purpose of this paragraph, a communication is “legally privileged” if it is a communication in respect of which a claim to legal professional privilege, or (in Scotland) to confidentiality of communications as between client and professional legal adviser, could be maintained in legal proceedings.

45

(1) Where a person carelessly or deliberately gives any incorrect information in a declaration under paragraph 44, the person is liable to a penalty not exceeding £5,000.

(2) For the purposes of this paragraph, incorrect information is carelessly given by a person if the information is incorrect because of a failure by the person to take reasonable care.

(3) Paragraphs 19(1), 20, 22(1), 37, 38 and 39(1), (2) and (5) apply in relation to a penalty under this paragraph as they apply in relation to a penalty under paragraph 1, subject to the modifications in sub-paragraphs (4) and (5).

(4) In its application to a penalty under this paragraph, paragraph 22(1) has effect as if for “the relevant time” there were substituted “the end of 12 months beginning with the date on which facts sufficient to indicate that the person is liable to the penalty came to the Commissioners' knowledge”.

(5) In its application to a penalty under this paragraph, paragraph 38(3) has effect as if the reference to the arrangements to which the penalty relates were to the arrangements to which the declaration under paragraph 44 relates.

(6) In paragraph 44 any reference to a penalty under paragraph 1 includes a reference to a penalty under this paragraph.

PART 10 — Publishing details of persons who have incurred penalties

Power to publish details

46

(1) The Commissioners may publish information about a person where—

(a) the person has incurred a penalty under paragraph 1,

(b) the penalty has become final, and

(2) The condition in this sub-paragraph is that, at the time when the penalty mentioned in sub-paragraph (1) becomes final, 50 or more other penalties which are reckonable penalties have been incurred by the person.

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

(a) the amount of the penalty mentioned in sub-paragraph (1), or

(b) the total amount of that penalty and any other penalties incurred by that person which are reckonable penalties,

is more than £25,000.

(4) The information that may be published under this paragraph is—

(a) the person's name (including any trading name, previous name or pseudonym),

(b) the person's address (or registered office),

(d) the total number of the penalties in question (that is, the penalty mentioned in sub-paragraph (1) and any penalties that are reckonable penalties in relation to that penalty),

(e) the total amount of the penalties in question, and

(f) any other information that the Commissioners consider it appropriate to publish in order to make clear the person's identity.

(5) The information may be published in any way that the Commissioners consider appropriate.

(6) For the purposes of this Part of this Schedule a penalty becomes “ final ”

(a) if the penalty has been assessed and paragraph (b) does not apply, at the time when the period for any appeal or further appeal relating to the penalty expires or, if later, when any appeal or final appeal relating to it is finally determined;

(b) if a contract settlement has been made in relation to the penalty, at the time when the contract is made;

and “contract settlement” here means a contract between the Commissioners and the person under which the Commissioners undertake not to assess the penalty or (if it has been assessed) not to take proceedings to recover it.

(7) “Reckonable penalty” has the meaning given by paragraph 47.

(8) This paragraph is subject to paragraphs 48 to 50.

47

(1) A penalty is a “reckonable penalty” for the purposes of paragraph 46 if—

(a) it is a penalty under paragraph 1 which becomes final at the same time as, or before, the penalty mentioned in paragraph 46(1),

(b) its entry date and the entry date of the penalty mentioned in paragraph 46(1) are not more than 12 months apart, and

(2) For the purposes of this paragraph the “entry date” of a penalty under paragraph 1 is the date (or, if more than one, the latest date) on which the arrangements concerned or any agreement or transaction forming part of those arrangements was entered into by the taxpayer.

(3) In sub-paragraph (2)—

“the arrangements concerned” means the arrangements to which the penalty relates, and

“the taxpayer” means the person whose defeat in respect of those arrangements resulted in the penalty being payable.

(4) For the purposes of this paragraph, the entry date of a penalty is not more than 12 months apart from the entry date of another penalty if—

(a) the entry dates of those penalties are the same, or

(b) the period beginning with whichever of the entry dates is the earlier and ending with whichever of the entry dates is the later is 12 months or less.

Restrictions on power

48

(1) In determining at any time whether or what information may be published in relation to a person under paragraph 46, the following penalties incurred by the person are to be disregarded—

(a) a penalty which has been reduced to nil or stayed;

(b) a penalty by reference to which information has previously been published under paragraph 46;

(d) a penalty that relates to arrangements which are related to arrangements that have already been dealt with (within the meaning given by sub-paragraph (4)).

(2) For the purposes of sub-paragraph (1)(d) arrangements are “related to” each other if they—

(a) implement the same proposal for tax arrangements, and

(b) are substantially the same as each other.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) For the purposes of sub-paragraph (1)(d) arrangements have “already been dealt with” if information about the person has already been published under paragraph 46 by reference to a penalty that relates to those arrangements.

49

(1) Publication of information under paragraph 46 on the basis of a penalty or penalties incurred by a person may not take place after the relevant time.

(2) In this paragraph “the relevant time” means the end of 12 months beginning with the date on which the penalty became final or, where more than one penalty is involved, the latest date on which any of them became final.

(3) Sub-paragraph (1) is not to be taken to prevent the re-publishing, or continued publishing, after the relevant time of a set of information published under paragraph 46 before that time.

(4) Information published under paragraph 46 may not be re-published, or continue to be published, after the end of 12 months beginning with the date on which it was first published.

(5) Nothing in paragraph 48 applies in relation to determining whether to re-publish (or continue to publish) a set of information already published under paragraph 46.

50

Before publishing information under paragraph 46 the Commissioners must—

(a) inform the person that they are considering doing so, and

(b) afford the person the opportunity to make representations about whether it should be published.

Power to amend

51

The Treasury may by regulations amend this Part of this Schedule so as to alter any of the following—

(a) the figure for the time being specified in paragraph 46(2);

(b) the sum for the time being specified in paragraph 46(3);

PART 11 — Miscellaneous

Double jeopardy

52

A person is not liable to a penalty under paragraph 1 in respect of conduct for which the person has been convicted of an offence.

Application of provisions of TMA 1970

53

Subject to the provisions of this Schedule, the following provisions of TMA 1970 apply for the purposes of this Schedule as they apply for the purposes of the Taxes Acts—

(a) section 108 (responsibility of company officers),

(b) section 114 (want of form), and

PART 12 — General

Meaning of “tax”

54

(1) In this Schedule “tax” includes any of the following taxes—

(a) income tax,

(b) corporation tax, including any amount chargeable as if it were corporation tax or treated as if it were corporation tax,

(d) petroleum revenue tax,

(e) diverted profits tax,

(f) apprenticeship levy,

(g) inheritance tax,

(h) stamp duty land tax, and

(i) annual tax on enveloped dwellings,

and also includes national insurance contributions.

(2) The Treasury may by regulations amend sub-paragraph (1) so as to—

(a) add a tax to the list of taxes for the time being set out in that sub-paragraph;

(b) remove a tax for the time being set out in that sub-paragraph;

(d) substitute for that reference a reference to national insurance contributions of a particular class or classes;

(e) where provision has been made under paragraph (d)—

(i) add a class or classes of national insurance contributions to those for the time being specified in that sub-paragraph;

(ii) remove a class or classes of national insurance contributions for the time being so specified.

(3) Regulations under this paragraph may—

(a) make supplementary, incidental, and consequential provision, including provision amending or repealing any provision of this Schedule;

(b) make transitional provision.

Meaning of “tax advantage”

55

In this Schedule “tax advantage” includes—

(a) relief or increased relief from tax,

(b) repayment or increased repayment of tax,

(d) avoidance or reduction of a charge to tax, an assessment of tax or a liability to pay tax,

(e) avoidance of a possible assessment to tax or liability to pay tax,

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

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

Other definitions

56

(1) In this Schedule—

“abusive tax arrangements” has the meaning given by paragraph 3;

“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

“business” includes any trade or profession;

“the Commissioners” means the Commissioners for Her Majesty‘s Revenue and Customs;

“company” has the same meaning as in the Corporation Tax Acts (see section 1121 of CTA 2010);

“contract settlement” (except in paragraph 46(6)) means an agreement in connection with a person's liability to make a payment to the Commissioners under or by virtue of an enactment;

“a defeat”, in relation to arrangements, is to be read in accordance with paragraph 4;

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

“the GAAR Advisory Panel” has the meaning given by paragraph 1 of Schedule 43 to FA 2013;

“group” is to be read in accordance with sub-paragraph (2);

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

“national insurance contributions” means contributions under Part 1 of the Social Security Contributions and Benefits Act 1992 or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992;

a “NICs decision” means a decision under section 8 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 or Article 7 of the Social Security Contributions (Transfer of Functions, etc.) (Northern Ireland) Order 1999 (SI 1999/671) relating to a person‘s liability for relevant contributions;

“relevant contributions” means any of the following contributions under Part 1 of the Social Security Contributions and Benefits Act 1992 or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992—Class 1 contributions;Class 1A contributions;Class 1B contributions;Class 2 contributions which must be paid but in relation to which section 11A of the Act in question (application of certain provisions of the Income Tax Acts) does not apply;

“tax” is to be read in accordance with paragraph 54;

“tax advantage” is to be read in accordance with paragraph 55.

(2) For the purposes of this Schedule two companies are members of the same group if—

(a) one is a 75% subsidiary of the other, or

(b) both are 75% subsidiaries of a third company;

and in this paragraph “75% subsidiary” has, subject to sub-paragraph (3), the meaning given by section 1154 of CTA 2010.

(3) So far as relating to 75% subsidiaries, section 151(4) of CTA 2010 (requirements relating to beneficial ownership) applies for the purposes of this Schedule as it applies for the purposes of Part 5 of that Act.

(4) In this Schedule references to an assessment to tax, however expressed—

(a) in relation to inheritance tax and petroleum revenue tax, include a determination;

(b) in relation to relevant contributions, include a NICs decision.

Regulations

57

(1) Any regulations under this Schedule must be made by statutory instrument.

(2) A statutory instrument which contains (alone or with other provision) any regulations within sub-paragraph (3) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.

(3) Regulations within this sub-paragraph are—

(a) regulations under paragraph 12;

(b) regulations under paragraph 14(1);

(d) regulations under paragraph 51;

(e) regulations under paragraph 54.

(4) A statutory instrument containing only—

(a) regulations under paragraph 14(2) which do not amend or repeal any provision of this Schedule, or

(b) regulations under paragraph 44,

is subject to annulment in pursuance of a resolution of the House of Commons.

Consequential amendments

58

In section 103ZA of TMA 1970 (disapplication of sections 100 to 103 of that Act in the case of certain penalties)—

(a) omit “or” at the end of paragraph (i), and

(b) after paragraph (j) insert

or (k) paragraph 1 or 45 of Schedule 16 to the Finance (No. 2) Act 2017 (enablers of defeated tax avoidance etc).

59

In section 54 of ITTOIA 2005 (no deduction allowed for certain penalties etc) at the end of the table in subsection (2) insert—

Penalty under Schedule 16 to F(No. 2)A 2017	Various taxes

60

In section 1303 of CTA 2009 (no deduction allowed for certain penalties etc) at the end of the table in subsection (2) insert—

Penalty under Schedule 16 to F(No. 2)A 2017	Various taxes

61

In Schedule 34 to FA 2014 (promoters of tax avoidance schemes: threshold conditions), in paragraph 7—

(a) in paragraph (a), for the words after “promoter” substitute

— (i) have been referred to the GAAR Advisory Panel under Schedule 43 to FA 2013 (referrals of single schemes), (ii) are in a pool in respect of which a referral has been made to that Panel under Schedule 43B to that Act (generic referrals), or (iii) have been referred to that Panel under paragraph 26 of Schedule 16 to F(No. 2)A 2017 (referrals in relation to penalties for enablers of defeated tax avoidance),

;

(b) in paragraph (b), for the words after “referral” substitute

under (as the case may be)— (i) paragraph 11(3)(b) of Schedule 43 to FA 2013, (ii) paragraph 6(4)(b) of Schedule 43B to that Act, or (iii) paragraph 34(3)(b) of Schedule 16 to F(No. 2)A 2017, (opinion of sub-panel of GAAR Advisory Panel that arrangements are not reasonable), and

Commencement

62

(1) Subject to sub-paragraphs (2) and (3), paragraphs 1 to 61 of this Schedule have effect in relation to arrangements entered into on or after the day on which this Act is passed.

(2) In determining in relation to any particular arrangements whether a person is a person who enabled the arrangements, any action of the person carried out before the day on which this Act is passed is to be disregarded.

(3) The amendments made by paragraph 61 do not apply in relation to a person who is a promoter in relation to arrangements if by virtue of sub-paragraph (2) above that person is not a person who enabled the arrangements.

SCHEDULE 17

PART 1 — Duties to disclose avoidance schemes etc

Preliminary: application of definitions

1

The definitions in paragraphs 2, 3, and 7 to 10 apply for the purposes of this Schedule.

“Indirect tax”

2

(1) “Indirect tax” means any of the following—

insurance premium tax

general betting duty

pool betting duty

remote gaming duty

machine games duty

gaming duty

lottery duty

bingo duty

air passenger duty

hydrocarbon oils duty

tobacco products duty

duties on spirits, beer, wine, made-wine and cider

soft drinks industry levy

aggregates levy

landfill tax

plastic packaging tax

climate change levy

customs duties.

(2) The Treasury may by regulations amend the list in sub-paragraph (1) by adding, varying or omitting an entry for a tax.

“Notifiable arrangements” and “notifiable proposal”

3

(1) “Notifiable arrangements” means any arrangements not excluded by sub-paragraph (2) which—

(a) fall within any description prescribed by the Treasury by regulations,

(b) enable, or might be expected to enable, any person to obtain a tax advantage in relation to any indirect tax that is so prescribed in relation to arrangements of that description, and

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

(2) Arrangements that meet the requirements in paragraphs (a) to (c) of sub-paragraph (1) are not notifiable arrangements if they implement a proposal which is excluded from being a notifiable proposal by sub-paragraph (4).

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

(4) A proposal is not a notifiable proposal if any of the following occur before 1 January 2018—

(a) a promoter first makes a firm approach to another person in relation to the proposal,

(b) a promoter makes the proposal available for implementation by any other person, or

4

(1) HMRC may apply to the tribunal for an order that—

(a) a proposal is notifiable, or

(b) arrangements are notifiable.

(2) An application must specify—

(a) the proposal or arrangements in respect of which the order is sought, and

(b) the promoter.

(3) On an application the tribunal may make the order only if satisfied that paragraph 3(1)(a) to (c) applies to the relevant arrangements and that they are not excluded from being notifiable by paragraph 3(2).

5

(1) HMRC may apply to the tribunal for an order that—

(a) a proposal is to be treated as notifiable, or

(b) arrangements are to be treated as notifiable.

(2) An application must specify—

(a) the proposal or arrangements in respect of which the order is sought, and

(b) the promoter.

(3) On an application the tribunal may make the order only if satisfied that HMRC—

(a) have taken all reasonable steps to establish whether the proposal or arrangements are notifiable, and

(b) have reasonable grounds for suspecting that the proposal or arrangements may be notifiable.

(4) Reasonable steps under sub-paragraph (3)(a) may (but need not) include taking action under paragraph 29 or 30.

(5) Grounds for suspicion under sub-paragraph (3)(b) may include—

(a) the fact that the relevant arrangements fall within a description prescribed under paragraph 3(1)(a),

(b) an attempt by the promoter to avoid or delay providing information or documents about the proposal or arrangements under or by virtue of paragraph 29 or 30,

(c) the promoter's failure to comply with a requirement under or by virtue of paragraph 29 or 30 in relation to another proposal or other arrangements.

(6) Where an order is made under this paragraph in respect of a proposal or arrangements, the relevant period for the purposes of sub-paragraph (1) of paragraph 11 or 12 in so far as it applies by virtue of the order is the period of 11 days beginning with the day on which the order is made.

(7) An order under this paragraph in relation to a proposal or arrangements is without prejudice to the possible application of any of paragraphs 11 to 15, other than by virtue of this paragraph, to the proposal or arrangements.

“Tax advantage” in relation to VAT

6

(1) A person (P) obtains a tax advantage in relation to VAT if—

(a) in any prescribed accounting period, the amount by which the output tax accounted for by P exceeds the input tax deducted by P is less than it would otherwise be;

(b) P obtains a VAT credit when P would otherwise not do so, or obtains a larger credit or obtains a credit earlier than would otherwise be the case;

(c) in a case where P recovers input tax as a recipient of a supply before the supplier accounts for the output tax, the period between the time when the input tax is recovered and the time when the output tax is accounted for is greater than would otherwise be the case;

(d) in any prescribed accounting period, the amount of P's non-deductible tax is less than it otherwise would be;

(e) P avoids an obligation to account for tax.

(2) In sub-paragraph (1)(d) “non-deductible tax”, in relation to a taxable person, means—

(a) input tax for which the person is not entitled to credit under section 25 of VATA 1994,

(b) any VAT incurred by the person which is not input tax and in respect of which the person is not entitled to a refund from the Commissioners by virtue of any provision of VATA 1994.

(3) For the purposes of sub-paragraph (2)(b), the VAT “incurred” by a taxable person is—

(a) VAT on the supply to the person of any goods or services,

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

(4) A person who is not a taxable person obtains a tax advantage in relation to VAT if that person's non-refundable tax is less that it otherwise would be.

(5) In sub-paragraph (4) “non-refundable tax” means—

(a) VAT on the supply to the person of any goods or services,

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

but excluding (in each case) any VAT in respect of which the person is entitled to a refund from the Commissioners by virtue of any provision of VATA 1994.

(6) Terms used in this paragraph which are defined in section 96 of VATA 1994 have the meanings given by that section.

“Tax advantage” in relation to taxes other than VAT

7

“Tax advantage”, in relation to an indirect tax other than VAT, means—

(a) relief or increased relief from tax,

(b) repayment or increased repayment of tax,

(d) avoidance of a possible assessment to tax or liability to pay tax,

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

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

“Promoter”

8

(1) This paragraph describes when a person (P) is a promoter in relation to a notifiable proposal or notifiable arrangements.

(2) P is a promoter in relation to a notifiable proposal if, in the course of a relevant business, P—

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

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

(3) P is a promoter in relation to notifiable arrangements if—

(a) P is by virtue of sub-paragraph (2)(b) or (c) a promoter in relation to a notifiable proposal which is implemented by the arrangements, or

(b) if in the course of a relevant business, P is to any extent responsible for—

(i) the design of the arrangements, or

(ii) the organisation or management of the arrangements.

(4) In this paragraph “relevant business” means any trade, profession or business which—

(a) involves the provision to other persons of services relating to taxation, or

(b) is carried on by a bank or securities house.

(5) In sub-paragraph (4)(b)—

“bank” has the meaning given by section 1120 of CTA 2010, and

“securities house” has the meaning given by section 1009(3) of that Act.

(6) For the purposes of this paragraph anything done by a company is to be taken to be done in the course of a relevant business if it is done for the purposes of a relevant business falling within sub-paragraph (4)(b) carried on by another company which is a member of the same group.

(7) Section 170 of the TCGA 1992 has effect for determining for the purposes of sub-paragraph (6) whether two companies are members of the same group, but as if in that section—

(a) for each of the references to a 75 per cent subsidiary there were substituted a reference to a 51 per cent subsidiary, and

(b) subsection (3)(b) and subsections (6) to (8) were omitted.

(8) A person is not to be treated as a promoter by reason of anything done in prescribed circumstances.

(9) In the application of this Schedule to a proposal or arrangements which are not notifiable, a reference to a promoter is a reference to a person who would be a promoter under this paragraph if the proposal or arrangements were notifiable.

“Introducer”

9

(1) A person is an introducer in relation to a notifiable proposal if the person makes a marketing contact with another person in relation to the proposal.

(2) A person is not to be treated as an introducer by reason of anything done in prescribed circumstances.

(3) In the application of this Schedule to a proposal or arrangements which are not notifiable, a reference to an introducer is a reference to a person who would be an introducer under this paragraph if the proposal or arrangements were notifiable.

“Makes a firm approach” and “marketing contact”

10

(1) A person makes a firm approach to another person in relation to a ... proposal if the person makes a marketing contact with the other person in relation to the proposal at a time when the proposed arrangements have been substantially designed.

(2) A person makes a marketing contact with another person in relation to a notifiable proposal if—

(a) the person communicates information about the proposal to the other person,

(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.

(3) For the purposes of sub-paragraph (1) proposed arrangements have been substantially designed at any time if by that time the nature of the transactions to form 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 sub-paragraph (2)(c) might enter into—

(a) transactions of the nature developed, or

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

Duties of promoter in relation to notifiable proposals or notifiable arrangements

11

(1) A person who is a promoter in relation to a notifiable proposal must, within the relevant period, provide HMRC with prescribed information relating to the proposal.

(2) In sub-paragraph (1) “the relevant period” is the period of 31 days beginning with the relevant date.

(3) In sub-paragraph (2) “the relevant date” is the earliest of the following—

(a) the date on which the promoter first makes a firm approach to another person in relation to the proposal,

(b) the date on which the promoter makes the proposal available for implementation by any other person, or

(c) the date on which the promoter first becomes aware of any transaction forming part of notifiable arrangements implementing the proposal.

12

(1) A person who is a promoter in relation to notifiable arrangements must, within the relevant period after the date on which the person first becomes aware of any transaction forming part of the arrangements, provide HMRC with prescribed information relating to the arrangements.

(2) In sub-paragraph (1) “the relevant period” is the period of 31 days beginning with that date.

(3) The duty under sub-paragraph (1) does not apply if the notifiable arrangements implement a proposal in respect of which notice has been given to HMRC under paragraph 11(1).

13

(1) This paragraph applies where a person complies with paragraph 11(1) in relation to a notifiable proposal for arrangements and another person is—

(a) also a promoter in relation to the proposal or is a promoter in relation to a notifiable proposal for arrangements which are substantially the same as the proposed arrangements (whether they relate to the same or different parties), or

(b) a promoter in relation to notifiable arrangements implementing the proposal or notifiable arrangements which are substantially the same as notifiable arrangements implementing the proposal (whether they relate to the same or different parties).

(2) Any duty of the other person under paragraph 11(1) or 12(1) in relation to the notifiable proposal or notifiable arrangements is discharged if—

(a) the person who complied with paragraph 11(1) has notified the identity and address of the other person to HMRC or the other person holds the reference number allocated to the proposed notifiable arrangements under paragraph 22(1), and

(b) the other person holds the information provided to HMRC in compliance with paragraph 11(1).

14

(1) This paragraph applies where a person complies with paragraph 12(1) in relation to notifiable arrangements and another person is—

(a) a promoter in relation to a notifiable proposal for arrangements which are substantially the same as the notifiable arrangements (whether they relate to the same or different parties), or

(b) also a promoter in relation to the notifiable arrangements or notifiable arrangements which are substantially the same (whether they relate to the same or different parties).

(2) Any duty of the other person under paragraph 11(1) or 12(1) in relation to the notifiable proposal or notifiable arrangements is discharged if—

(a) the person who complied with paragraph 12(1) has notified the identity and address of the other person to HMRC or the other person holds the reference number allocated to the notifiable arrangements under paragraph 22(1), and

(b) the other person holds the information provided to HMRC in compliance with paragraph 12(1).

15

Where a person is a promoter in relation to two or more notifiable proposals or sets of notifiable arrangements which are substantially the same (whether they relate to the same parties or different parties) the person need not provide information under paragraph 11(1) or 12(1) if the person has already provided information under either of those paragraphs in relation to any of the other proposals or arrangements.

Duty of promoter: supplemental information

16

(1) This paragraph applies where—

(a) a promoter (P) has provided information in purported compliance with paragraph 11(1) or 12(1), but

(b) HMRC believe that P has not provided all the prescribed information.

(2) HMRC may apply to the tribunal for an order requiring P to provide specified information about, or documents relating to, the notifiable proposal or arrangements.

(3) The tribunal may make an order under sub-paragraph (2) in respect of information or documents only if satisfied that HMRC have reasonable grounds for suspecting that the information or documents—

(a) form part of the prescribed information, or

(b) will support or explain the prescribed information.

(4) A requirement by virtue of sub-paragraph (2) is to be treated as part of P's duty under paragraph 11(1) or 12(1).

(5) In so far as P's duty under sub-paragraph (1) of paragraph 11 or 12 arises out of an order made by virtue of sub-paragraph (2) above the relevant period for the purposes of that sub-paragraph (1) is—

(a) the period of 11 days beginning with the date of the order, or

(b) such longer period as HMRC may direct.

Duty of person dealing with promoter outside United Kingdom

17

(1) This paragraph applies where a person enters into any transaction forming part of any notifiable arrangements in relation to which—

(a) a promoter is resident outside the United Kingdom, and

(b) no promoter is resident in the United Kingdom.

(2) The person must, within the relevant period, provide HMRC with prescribed information relating to the arrangements.

(3) In sub-paragraph (2) “the relevant period” is the period of 6 days beginning with the day on which the person enters into the first transaction forming part of the arrangements.

(4) Compliance with paragraph 11(1) or 12(1) by any promoter in relation to the arrangements discharges the person's duty under sub-paragraph (1).

Duty of parties to notifiable arrangements not involving promoter

18

(1) This paragraph applies to any person who enters into any transaction forming part of notifiable arrangements as respects which neither that person nor any other person in the United Kingdom is liable to comply with paragraph 11(1), 12(1) or 17(2).

(2) The person must at the prescribed time provide HMRC with prescribed information relating to the arrangements.

Duty to provide further information requested by HMRC

19

(1) This paragraph applies where—

(a) a person has provided the prescribed information about notifiable proposals or arrangements in compliance with paragraph 11(1), 12(1), 17(2) or 18(2), or

(b) a person has provided information in purported compliance with paragraph 17(2) or 18(2) but HMRC believe that the person has not provided all the prescribed information.

(2) HMRC may require the person to provide—

(a) further specified information about the notifiable proposals or arrangements (in addition to the prescribed information under paragraph 11(1), 12(1), 17(2) or 18(2));

(b) documents relating to the notifiable proposals or arrangements.

(3) Where HMRC impose a requirement on a person under this paragraph, the person must comply with the requirement within—

(a) the period of 10 working days beginning with the day on which HMRC imposed the requirement, or

(b) such longer period as HMRC may direct.

20

(1) This paragraph applies where HMRC—

(a) have required a person to provide information or documents under paragraph 19, but

(b) believe that the person has failed to provide the information or documents required.

(2) HMRC may apply to the tribunal for an order requiring the person to provide the information or documents required.

(3) The tribunal may make an order imposing such a requirement only if satisfied that HMRC have reasonable grounds for suspecting that the information or documents will assist HMRC in considering the notifiable proposals or arrangements.

(4) Where the tribunal makes an order imposing such a requirement, the person must comply with the requirement within—

(a) the period of 10 working days beginning with the day on which the tribunal made the order, or

(b) such longer period as HMRC may direct.

Duty of promoters to provide updated information

21

(1) This paragraph applies where—

(a) information has been provided under paragraph 11(1), or 12(1) about any notifiable arrangements, or proposed notifiable arrangements, to which a reference number is allocated under paragraph 22, and

(b) after the provision of the information, there is a change in relation to the arrangements of a kind mentioned in sub-paragraph (2).

(2) The changes referred to in sub-paragraph (1)(b) are—

(a) a change in the name by which the notifiable arrangements, or proposed notifiable arrangements, are known;

(b) a change in the name or address of any person who is a promoter in relation to the arrangements or, in the case of proposed arrangements, the notifiable proposal.

(3) A person who is a promoter in relation to the notifiable arrangements or, in the case of proposed notifiable arrangements, the notifiable proposal must inform HMRC of the change mentioned in sub-paragraph (1)(b) within 30 days after it is made.

(4) Sub-paragraphs (5) and (6) apply for the purposes of sub-paragraph (3) where there is more than one person who is a promoter in relation to the notifiable arrangements or proposal.

(5) If the change in question is a change in the name or address of a person who is a promoter in relation to the notifiable arrangements or proposal, it is the duty of that person to comply with sub-paragraph (3).

(6) If a person provides information in compliance with sub-paragraph (3), the duty imposed by that sub-paragraph on any other person, so far as relating to the provision of that information, is discharged.

Arrangements to be given reference number

22

(1) This paragraph applies in—

(a) a sub-paragraph (2) case, or

(b) a sub-paragraph (3) case.

(2) A “sub-paragraph (2) case” is a case where a person complies, or purports to comply, with paragraph 11(1), 12(1), 17(2) or 18(2) in relation to a notifiable proposal or notifiable arrangements.

(3) A “sub-paragraph (3) case” is a case where—

(a) notice in relation to arrangements or a proposal has been issued in accordance with paragraph 21A (notice of potential allocation of reference number),

(b) the notice period has expired, and

(c) the person to whom the notice was given has failed to satisfy HMRC, before the expiry of the notice period, that the arrangements are not notifiable or (as the case may be) that the proposal is not notifiable.

(4) “The notice period” means—

(a) the period of 30 days beginning with the day on which the notice under paragraph 21A is issued, or

(b) such longer period as HMRC may direct.

(5) HMRC may allocate a reference number to the arrangements or, in the case of a proposal, the proposed arrangements, subject to sub-paragraph (6).

(6) HMRC may not allocate a reference number to arrangements or proposed arrangements after the time limit for doing so.

(7) The time limit for allocating a reference number is—

(a) in a sub-paragraph (2) case, the end of the period of 90 days beginning with the compliance, or purported compliance, with paragraph 11(1), 12(1), 17(2) or 18(2), as the case may be;

(b) in a sub-paragraph (3) case, the end of the period of one year beginning with the day after the end of the notice period (see sub-paragraph (4)).

(8) HMRC may at any time withdraw a reference number allocated to arrangements in a sub-paragraph (3) case.

(9) The allocation of a reference number to arrangements or proposed arrangements is not to be regarded as constituting an indication by HMRC that the arrangements could as a matter of law result in the obtaining by any person of a tax advantage.

Duty of promoter to notify client of number

23

(1) This paragraph applies where a person who is a promoter in relation to notifiable arrangements is providing (or has provided) services to any person (“the client”) in connection with the arrangements.

(2) The promoter must, within 30 days after the relevant date, provide the client with prescribed information relating to any reference number allocated in a case within paragraph 22(2) (or, if more than one, any one such reference number) that has been notified to the promoter (whether by HMRC or any other person) in relation to—

(a) the notifiable arrangements, or

(b) any arrangements substantially the same as the notifiable arrangements (whether involving the same or different parties).

(3) In sub-paragraph (2) “the relevant date” means the later of—

(a) the date on which the promoter becomes aware of any transaction which forms part of the notifiable arrangements, and

(b) the date on which the reference number is notified to the promoter.

(4) But where the conditions in sub-paragraph (5) are met the duty imposed on the promoter under sub-paragraph (2) to provide the client with information in relation to notifiable arrangements is discharged

(5) Those conditions are—

(a) that the promoter is also a promoter in relation to a notifiable proposal and provides services to the client in connection with them both,

(b) the notifiable proposal and the notifiable arrangements are substantially the same, and

(c) the promoter has provided to the client, in a form and manner specified by HMRC, prescribed information relating to the reference number that has been notified to the promoter in relation to the proposed notifiable arrangements.

(6) HMRC may give notice that, in relation to notifiable arrangements specified in the notice, promoters are not under the duty under sub-paragraph (2) after the date specified in the notice.

Duty of client to notify parties of number

24

(1) In this paragraph “client” means a person to whom a person ... is providing (or has provided) services in connection with arrangements or a proposal.

(2) Sub-paragraph (3) applies where—

(a) the client receives prescribed information under paragraph 23 relating to the reference number allocated to—

(i) the arrangements or proposed arrangements, or

(ii) any arrangements substantially the same as the arrangements or proposed arrangements; or

(b) the client receives prescribed information under paragraph 23A relating to the reference number allocated to—

(i) the arrangements or proposed arrangements, or

(ii) any arrangements substantially the same as the arrangements or proposed arrangements.

(3) The client must, within the relevant period, provide prescribed information relating to the reference number to any other person—

(a) who the client might reasonably be expected to know is or is likely to be a party to the arrangements or proposed arrangements, and

(b) who might reasonably be expected to gain a tax advantage in relation to any relevant tax by reason of the arrangements or proposed arrangements.

(4) In sub-paragraph (3) “the relevant period” is the period of 30 days beginning with the later of—

(a) the day on which the client first becomes aware of any transaction forming part of the arrangements or proposed arrangements, and

(b) the day on which the prescribed information is notified to the client under paragraph 23 or (as the case may be) paragraph 23A.

(5) HMRC may give notice that, in relation to arrangements or a proposal specified in the notice, persons are not under the duty under sub-paragraph (3) after the date specified in the notice.

(6) The duty under sub-paragraph (3) does not apply in prescribed circumstances.

(7) For the purposes of this paragraph a tax is a “relevant tax”, in relation to arrangements or arrangements proposed in a proposal of any description, if it is prescribed in relation to arrangements or proposals of that description by regulations under paragraph 3(1).

Duty of client to provide information to promoter

25

(1) This paragraph applies where a person (“the client”) has been provided with information under paragraph 23(2) or 23A(2) (prescribed information about reference number).

(2) The client must, within the relevant period, provide the person who provided the information with prescribed information relating to the client.

(3) In sub-paragraph (2) “the relevant period” is the period of 11 days beginning with the later of—

(a) the date the client receives the reference number for the arrangements, and

(b) the date the client first enters into a transaction which forms part of the arrangements.

(4) The duty under sub-paragraph (2) is subject to any exceptions that may be prescribed.

Duty of parties to notifiable arrangements to notify HMRC of number, etc

26

(1) Any person (P) who is a party to any ... arrangements must provide HMRC with prescribed information relating to—

(a) any reference number notified to P under paragraph 23 , 23A or 24, and

(b) the time when P obtains or expects to obtain by virtue of the arrangements a tax advantage in relation to any relevant tax.

(2) For the purposes of sub-paragraph (1) a tax is a “relevant tax” in relation to arrangements of any description if it is prescribed in relation to arrangements of that description by regulations under paragraph 3(1).

(3) Regulations made by the Commissioners may—

(a) in prescribed cases, require the information prescribed under sub-paragraph (1) to be given to HMRC—

(i) in the prescribed manner,

(ii) in the prescribed form,

(iii) at the prescribed time, and

(b) in prescribed cases, require the information prescribed under sub-paragraph (1) and such other information as is prescribed to be provided separately to HMRC at the prescribed time or times.

(4) In sub-paragraph (3) “prescribed” includes being prescribed in a document made under a power conferred by regulations made by the Commissioners.

(5) HMRC may give notice that, in relation to ... arrangements specified in the notice, persons are not under the duty under sub-paragraph (1) after the date specified in the notice.

(6) The duty under sub-paragraph (1) does not apply in prescribed circumstances.

Duty of promoter to provide details of clients

27

(1) This paragraph applies where a person who is a promoter in relation to notifiable arrangements is providing (or has provided) services to any person (“the client”) in connection with the arrangements and either—

(a) the promoter is subject to the requirement under paragraph 23(2) to provide to the client prescribed information relating to the reference number allocated to—

(i) the arrangements, or

(ii) any arrangements substantially the same as the arrangements; or

(b) the promoter has failed to comply with paragraph 11(1) or 12(1) in relation to the notifiable arrangements (or the notifiable proposal for them) but would be subject to that requirement if a reference number had been allocated to—

(i) the notifiable arrangements, or

(ii) any arrangements substantially the same as the arrangements.

(1A) This paragraph also applies where—

(a) a person (“the provider”) is providing (or has provided) services to another person (“the client”) in connection with arrangements or proposed arrangements, and

(b) the provider is subject to the requirement under paragraph 23A(2) to provide to the client prescribed information relating to the reference number allocated to—

(i) the arrangements or proposed arrangements, or

(ii) any arrangements substantially the same as the arrangements or proposed arrangements.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The promoter or (as the case may be) provider must, within the prescribed period after the end of the relevant period, provide HMRC with prescribed information in relation to the client.

(4) In sub-paragraph (3) “the relevant period” means—

(a) in a case within sub-paragraph (1), such period as is prescribed and is a period during which the promoter is or would be subject to the requirement mentioned in that sub-paragraph;

(b) in a case within sub-paragraph (1A), such period as is prescribed and is a period during which the provider is or would be subject to the requirement mentioned in that sub-paragraph.

(5) The promoter need not comply with sub-paragraph (3) in relation to any notifiable arrangements at any time after HMRC have given notice under paragraph 23(6) in relation to the arrangements.

(6) The provider need not comply with sub-paragraph (3) in relation to any arrangements at any time after HMRC have given notice under paragraph 23A(4) in relation to the arrangements.

Enquiry following disclosure of client details

28

(1) This paragraph applies where—

(a) a person (“the service provider”) is providing or has provided services to another person (“the client”) in connection with arrangements or proposed arrangements,

(aa) the service provider has provided HMRC with information in relation to the client under paragraph 27(3), and

(b) HMRC suspect that a person other than the client is or is likely to be a party to the arrangements.

(2) HMRC may by written notice require the service provider to provide prescribed information in relation to any person other than the client who the service provider might reasonably be expected to know is or is likely to be a party to the arrangements.

(3) The service provider must comply with a requirement under or by virtue of sub-paragraph (2) within—

(a) the relevant period, or

(b) such longer period as HMRC may direct.

(4) In sub-paragraph (3) “the relevant period” is the period of 11 days beginning with the day on which the service provider receives the notice under sub-paragraph (2).

Pre-disclosure enquiry

29

(1) Where HMRC suspect that a person (P) is the promoter or introducer of a proposal, or the promoter of arrangements, which may be notifiable, they may by written notice require P to state—

(a) whether in P's opinion the proposal or arrangements are notifiable by P, and

(b) if not, the reasons for P's opinion.

(2) The notice must specify the proposal or arrangements to which it relates.

(3) For the purposes of sub-paragraph (1)(b)—

(a) it is not sufficient to refer to the fact that a lawyer or other professional has given an opinion,

(b) the reasons must show, by reference to this Part of this Schedule and regulations under it, why P thinks the proposal or arrangements are not notifiable by P, and

(c) in particular, if P asserts that the arrangements do not fall within any description prescribed under paragraph 3(1)(a), the reasons must provide sufficient information to enable HMRC to confirm the assertion.

(4) P must comply with a requirement under or by virtue of sub-paragraph (1) within—

(a) the relevant period, or

(b) such longer period as HMRC may direct.

(5) In sub-paragraph (4) “the relevant period” is the period of 11 days beginning with the day on which the notice under sub-paragraph (1) is issued.

Reasons for non-disclosure: supporting information

30

(1) Where HMRC receive from a person (P) a statement of reasons why a proposal or arrangements are not notifiable by P, HMRC may apply to the tribunal for an order requiring P to provide specified information or documents in support of the reasons.

(2) P must comply with a requirement under or by virtue of sub-paragraph (1) within—

(a) the relevant period, or

(b) such longer period as HMRC may direct.

(3) In sub-paragraph (2) “the relevant period” is the period of 15 days beginning with the day on which the order concerned is made.

(4) The power under sub-paragraph (1)—

(a) may be exercised more than once, and

(b) applies whether or not the statement of reasons was received under paragraph 29(1)(b).

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