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A7.330 Sanctions for serial tax avoidance—overview

A regime of warnings and escalating sanctions applies for those who persistently and repeatedly use tax avoidance schemes which are defeated by HMRC¹, and can be summarised as follows:

1. Ìý

   •ÌýÌýÌýÌý following the first defeat of a tax avoidance scheme, HMRC will issue a warning notice to the taxpayer, which will last five years initially

2. Ìý

   •ÌýÌýÌýÌý during the warning notice period, the taxpayer must report annually to HMRC regarding their activities (and particularly any tax avoidance activities) in that year

3. Ìý

   •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

   •ÌýÌýÌýÌý if the taxpayer incurs three defeats in a warning period, HMRC