What is the disclosure of schemes of tax avoidance (DOTAS)’
DOTAS (disclosure of schemes of tax evasion) is an abbreviation used in the procedure introduced by the UK government in 2004, aimed at minimizing tax evasion. The tax evasion in the UK, unlike tax evasion, is not illegal because it involves the use of existing tax laws to reduce tax burden. However, the government is actively seeking ways to eliminate methods of taxation can be avoided by constant amendments to tax policy.
Breaking down the ‘disclosure of schemes of tax avoidance (DOTAS)’
The main purpose of the disclosure of schemes of tax avoidance (DOTAS), to warn Her Majesty’s revenue and customs (hmrc) schemes, which individuals or corporations use to avoid taxes. HMRC can investigate these schemes and their suppliers and, consequently, can make changes to the legislation deemed necessary to reduce the options of tax evasion, which can circumvent the law. In accordance with the legislation DOTAS who is involved in the contract, which offers tax benefits, must notify Her Majesty’s revenue and customs (hmrc).
Types of taxes covered by the DOTAS requirements to include in income and the tax on capital gains, corporate tax, stamp duty land tax, inheritance tax, value added tax (VAT) and national insurance contributions.
The disclosure required to be made by any party, member of the program, which provides tax minimization, if the program is included in the disclosure rules. Violators of these rules DOTAS, perhaps punishment. There are two separate procedures for disclosure. The first is related to the value added tax (VAT), and the second from a direct tax and contributions to the national insurance system.
Discouraging Schemes Of Tax Evasion
With DOTAS, HMRC warns of the consequences of input of schemes of evasion from payment of taxes and makes it clear that anyone doing so could be challenged in court for non-compliance.
NTS also offers tips about the pitfalls of involvement in schemes of tax evasion, suggesting that most of these programs are ineffective for the participants. Typically, these schemes serve no real purpose, except obtaining tax benefit, and include processes that are conducted just for this purpose. These schemes often sound, and in many cases, too good to be true, promising significant savings participant for a small fee or for free.
The holding of the promoters of the DOTAS responsibility
The initial and main purpose of DOTAS was a requirement of the organizers of schemes of evasion from payment of taxes to inform the government about their activities. The developer, usually falls into the category of provider of tax service, houses, securities or banking institutions. These promoters are involved in the organization, provision and management of any system, which includes the tax evasion service. They can also be involved in the creation or marketing of the scheme.
Since the establishment of DOTAS, promoters continue to find loopholes and have developed ways to take advantage of these loopholes. NTS strives to keep abreast of this ongoing fraudulent by amending existing laws. In February 2016, the criteria DOTAS rules have been substantially expanded with the intention to cover more standard practice of tax planning, as well as more dubious schemes. As soon as the promoter had not done this, HMRC will provide a DOTAS number which should be used by the system. Then the system will be checked for compliance, and the mismatch of the parties may be punished or dismissed for violation of the conditions.