What is the STAR?
STAR stands for the Serial Tax Avoidance Regime and applies from 15 September 2016 to any scheme HMRC defeat after that date.
Watch our video to find everything you need to know.
How do HMRC defeat a scheme?
For HMRC to defeat a scheme, there are 5 conditions that need to be met:
- The tax advantage of the scheme has been counteracted under FA 2013 and that counteraction is final
- A follower notice has been issued in relation to the arrangements
- The arrangements are DOTAS, have been counteracted and that counteraction is final
- The arrangements are disclosable VAT arrangements, which the taxpayer has been a party to, have been counteracted and that counteraction is final
- The arrangements are disclosable VAT arrangements, which the supplier to the taxpayer has been a party to and which the taxpayer might be expected to get an advantage, have been counteracted and that counteraction is final
What happens to a taxpayer in the STAR?
- Issued with a penalty
- Issued with a warning notice which requires additional information to be sent to HMRC for 5 years
- May be publicly named and shamed
- May be unable to use some tax reliefs
How can a taxpayer prevent themselves being included in the STAR?
Make a disclosure to HMRC before 5 April 2017 or notify HMRC before 6 April 2017 of your intention to make a disclosure within a time frame set by them.
What if a taxpayer is still using a scheme?
The option to be excluded from the STAR with be unavailable to you. If the taxpayer has subsequent schemes defeated, the warning notice period will be extended and the penalty increased.