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V5.212A Overview of the POTAS regime for VAT and indirect tax

POTAS is a regime that aims to change the behaviour of promoters of avoidance schemes, and to deter the development and use of avoidance schemes. The regime builds on the existing regime for the disclosure of tax avoidance schemes (DOTAS) and shares many similar definitions. See V5.213 for more detail on DOTAS.

The legislation targets¹ certain promoters of tax avoidance schemes (also referred to as 'high risk promoters') whom HMRC regard as constituting a higher risk. The promoters of tax avoidance scheme rules are commonly referred to as POTAS. The legislation is strict and has expanded over time to include all indirect taxes.

Generally, these rules apply to 'promoters' of certain arrangements that may give rise to a 'tax advantage'. The definition of 'promoter' was widened by FA 2021 to prevent promoters from abusing business structures to avoid their obligations under the POTAS regime by including any person who is a 'member of a promotion structure',