Promoters of Tax Avoidance Schemes: Updated HMRC Guidance
In May 2025 Paul Baxendale-Walker, who was struck off as a solicitor in 2007, was recently ordered to stop promoting tax avoidance schemes in what is understood to be the first time HMRC has sent a Stop Notice to an individual.
Important new guidance from HMRC explains who is considered a ‘promoter’ and the implications of their activities.
Since February 2024, promoters who don’t comply with Stop Notices risk criminal prosecution. HMRC’s powers have also increased – and the government is continuing to tighten measures to tackle tax avoidance.
Guidance on promoters
HMRC has now updated its guidance on disclosure of tax avoidance schemes, reflecting the very latest developments in policy and case law. Businesses and professional advisers in this area need to keep abreast of the circumstances in which HMRC is likely to consider a scheme as tax avoidance.
The focus of the guidance is on when an individual in the course of a relevant business may be considered a promoter of, or introducer to a tax avoidance scheme.
The guidance advises what you should do if you promote, or are otherwise involved in, schemes that will, or are intended to provide a tax advantage. You may be required to tell HMRC that you use or promote such a scheme. This applies to income tax, corporation tax, CGT, inheritance tax, national insurance and SDLT (but not VAT).
Disclosure obligations
HMRC makes clear that:
· You must disclose a ‘notifiable scheme’ – even if HMRC is already aware of it
· Users of a tax scheme must have systems in place to monitor for such schemes
· Disclosure must be made by the promoter within 5 days of a ‘trigger’ event (the promoter approaches someone offering the scheme, or the promoter becomes aware of a tax avoidance transaction)
· It has power, where it suspects a scheme should have been disclosed, to allocate a scheme reference number (SRN)
Promoters
The update sets out who amounts to a ‘promoter’ or ‘introducer’ for the purposes of the rules. A promoter, for example, is anyone largely responsible for designing a scheme, offers such a scheme or makes it available for others to implement.
An introducer is someone who advertises notifiable schemes on the promoter’s behalf.
In Hyrax Resourcing Ltd (2022) the FTT concluded that a person could make a proposal available for implementation, even if they could not ensure someone else could not use it. Further decisions illustrating the circumstances in which someone could be considered a promoter are helpfully highlighted.
The guidance (section 14.2) has also been updated to clarify the obligation on promoters and suppliers, particularly where they have been notified that an SRN has been allocated. Within 30 days the person notified must provide the scheme reference number to clients within the scheme (or becoming aware of any transaction that forms part of the scheme).
If you have any doubts whether the guidance applies to your circumstances, always seek specialist legal advice from tax solicitors.
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