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FA 2016, Sch 18 relates to serial tax avoidance. It provides for a regime to combat the persistent and repeated use of tax avoidance schemes which are defeated by HMRC and may be summarised as follows:

1. Ìý

   (1)ÌýÌýÌýÌý Following the defeat of a tax avoidance scheme, HMRC issue the taxpayer a warning notice, which lasts initially for five years.

2. Ìý

   (2)ÌýÌýÌýÌý During the warning notice period, the taxpayer must report on a yearly basis to HMRC regarding its activities (and particularly any tax avoidance activities) in that year.

3. Ìý

   (3)ÌýÌýÌýÌý If a further tax avoidance scheme used by the taxpayer in the warning notice period is defeated by HMRC, a penalty will be imposed. Further penalties, on an escalating scale, will apply to any further defeats in the warning period.

4. Ìý

   (4)ÌýÌýÌýÌý If the taxpayer incurs three defeats in a warning period, HMRC may publish details of the taxpayer.

The regime applies to both VAT and direct taxes¹. The commentary in this section relates to the regime