SCHEDULES
SCHEDULE 18Serial tax avoidance
PART 2Entry into the regime and basic concepts
F1Condition F
16A
1
Condition F is that—
a
the arrangements are indirect tax arrangements,
b
P has relied on the arrangements (see sub-paragraph (2),
c
the arrangements have been counteracted, and
d
the counteraction is final.
2
For the purpose of sub-paragraph (1) P relies on the arrangements if—
a
P makes a return, claim, declaration or application for approval on the basis that a relevant tax advantage arises, or
b
P fails to discharge a relevant obligation (“the disputed obligation”) and there is reason to believe that P’s failure to discharge that obligation is connected with the arrangements.
3
For the purposes of sub-paragraph (2) “relevant tax advantage” means a tax advantage which the arrangements might be expected to enable P to obtain.
4
For the purposes of sub-paragraph (2) an obligation is a relevant obligation if the arrangements might be expected to have the result that the obligation does not arise.
5
For the purposes of this paragraph the arrangements are “counteracted” if—
a
adjustments, other than taxpayer emendations, are made in respect of P’s tax position —
i
on the basis that the whole or part of the relevant tax advantage mentioned in sub-paragraph (2)(a) does not arise, or
ii
on the basis that the disputed obligation does (or did) arise, or
b
an assessment to tax is made, or any other action is taken by HMRC, on the basis mentioned in paragraph (a)(i) or (ii) (otherwise than by way of an adjustment).
6
For the purposes of this paragraph a “counteraction” is final when the adjustments, assessment or action in question, and any amounts arising from the adjustments, assessment or action, can no longer be varied, on appeal or otherwise.
7
For the purposes of sub-paragraph (1) the time at which it falls to be determined whether or not the arrangements are disclosable indirect tax arrangements is when the counteraction becomes final.
8
The following are “taxpayer emendations” for the purposes of sub-paragraph (5)—
a
an adjustment made by P at a time when P had no reason to believe that HMRC had begun or were about to begin enquiries into P’s affairs in relation to the tax in question;
b
an adjustment made by HMRC with respect to P’s tax position (whether by way of an assessment or otherwise) as a result of a disclosure by P which meets the conditions in sub-paragraph (9).
9
The conditions are that the disclosure—
a
is a full and explicit disclosure of an inaccuracy in a return or other document or of a failure to comply with an obligation, and
b
was made at a time when P had no reason to believe that HMRC were about to begin enquiries into P’s affairs in relation to the tax in question.
Sch. 18 para. 16A and cross-heading inserted (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by Finance (No. 2) Act 2017 (c. 32), s. 66(4), Sch. 17 para. 55(10)