Finance Bill (HC Bill 10)

(4) Having considered the representations, HMRC must—

(a) if representations were made under subsection (2)(a), determine
whether—

(i) to confirm the accelerated payment notice (with or without
5amendment), or

(ii) to withdraw the accelerated payment notice, and

(b) if representations were made under subsection (2)(b) (and the notice is
not withdrawn under paragraph (a)), determine whether a different
amount ought to have been specified under section 213(2)(b) or section
10214(2)(b), and then—

(i) confirm the amount specified in the notice, or

(ii) amend the notice to specify a different amount,

and notify P accordingly.

Forms of accelerated payment

216 15Effect of notice given while tax enquiry is in progress

(1) This section applies where an accelerated payment notice is given by virtue of
section 212(2)(a) (notice given while a tax enquiry is in progress) (and not
withdrawn).

(2) P must make a payment (“the accelerated payment”) to HMRC of the amount
20specified in the notice in accordance with section 213(2)(b).

(3) The accelerated payment is to be treated as a payment on account of the
understated tax (see section 213).

(4) The accelerated payment must be made before the end of the payment period.

(5) “The payment period” means—

(a) 25if P made no representations under section 215, the period of 90 days
beginning with the day on which the accelerated payment notice is
given, and

(b) if P made such representations, whichever of the following periods
ends later—

(i) 30the 90 day period mentioned in paragraph (a);

(ii) the period of 30 days beginning with the day on which P is
notified under section 215 of HMRC’s determination.

(6) But where the understated tax would be payable by instalments by virtue of an
election made under section 227 of IHTA 1984, to the extent that the accelerated
35payment relates to tax payable by an instalment which falls to be paid at a time
after the payment period, the accelerated payment must be made no later than
that time.

(7) If P pays any part of the understated tax before the accelerated payment in
respect of it, the accelerated payment is treated to that extent as having been
40paid at the same time.

(8) Any tax enactment which relates to the recovery of a relevant tax applies to an
amount to be paid on account of the relevant tax under this section in the same
manner as it applies to an amount of the relevant tax.

(9) “Tax enactment” means provisions of or made under—

(a) the Tax Acts,

(b) any enactment relating to capital gains tax,

(c) IHTA 1984 or any other enactment relating to inheritance tax,

(d) Part 4 of FA 2003 or any other enactment relating to stamp duty land
5tax, or

(e) Part 3 of FA 2013 or any other enactment relating to annual tax on
enveloped dwellings.

217 Restriction on powers to postpone tax payments pending initial appeal

(1) In section 55 of TMA 1970 (recovery of tax not postponed), after subsection
10(8A) insert—

“(8B) Subsections (8C) and (8D) apply where a person has been given an
accelerated payment notice or partner payment notice under Chapter 3
of Part 4 of the Finance Act 2014 and that notice has not been
withdrawn.

(8C) 15Nothing in this section enables the postponement of the payment of (as
the case may be)—

(a) the understated tax to which the payment specified in the notice
under section 213(2)(b) of that Act relates,

(b) the disputed tax specified in the notice under section 214(2)(b)
20of that Act, or

(c) the understated partner tax to which the payment specified in
the notice under paragraph 4(1)(b) of Schedule 28 to that Act
relates.

(8D) Accordingly, if the payment of an amount of tax within subsection
25(8C)(b) is postponed by virtue of this section immediately before the
accelerated payment notice is given, it ceases to be so postponed with
effect from the time that notice is given, and the tax is due and
payable—

(a) if no representations were made under section 215 of that Act in
30respect of the notice, on or before the last day of the period of 90
days beginning with the day the notice or partner payment
notice is given, and

(b) if representations were so made, on or before whichever is later
of—

(i) 35the last day of the 90 day period mentioned in
paragraph (a), and

(ii) the last day of the period of 30 days beginning with the
day on which HMRC’s determination in respect of those
representations is notified under section 215 of that
40Act.”

(2) In section 242 of IHTA 1984 (recovery of tax), after subsection (3) insert—

“(4) Where a person has been given an accelerated payment notice under
Chapter 3 of Part 4 of the Finance Act 2014 and that notice has not been
withdrawn, nothing in this section prevents legal proceedings being
45taken for the recovery of (as the case may be)—

(a) the understated tax to which the payment specified in the notice
under section 213(2)(b) of that Act relates, or

(b) the disputed tax specified in the notice under section 214(2)(b)
of that Act.”

(3) In Schedule 10 to FA 2003 (SDLT: returns, enquiries, assessments and appeals),
in paragraph 39 (direction by the tribunal to postpone payment), after sub-
5paragraph (8) insert—

“(9) Sub-paragraphs (10) and (11) apply where a person has been given
an accelerated payment notice under Chapter 3 of Part 4 of the
Finance Act 2014 and that notice has not been withdrawn.

(10) Nothing in this paragraph enables the postponement of the payment
10of (as the case may be)—

(a) the understated tax to which the payment specified in the
notice under section 213(2)(b) of that Act relates, or

(b) the disputed tax specified in the notice under section
214(2)(b) of that Act.

(11) 15Accordingly, if the payment of an amount of tax within sub-
paragraph (10)(b) is postponed by virtue of this paragraph
immediately before the accelerated payment notice is given, it ceases
to be so postponed with effect from the time that notice is given, and
the tax is due and payable—

(a) 20if no representations were made under section 215 of that Act
in respect of the notice, on or before the last day of the period
of 90 days beginning with the day the notice is given, and

(b) if representations were so made, on or before whichever is
later of—

(i) 25the last day of the 90 day period mentioned in
paragraph (a), and

(ii) the last day of the period of 30 days beginning with
the day on which HMRC’s determination in respect
of those representations is notified under section 215
30of that Act.”

(4) In paragraph 40 of that Schedule (agreement to postpone payment of tax), after
sub-paragraph (3) insert—

“(4) Sub-paragraphs (9) to (11) of paragraph 39 apply for the purposes of
this paragraph as they apply for the purposes of paragraph 39.”

(5) 35In Schedule 33 to FA 2013 (annual tax on enveloped dwellings: returns,
enquiries, assessments and appeals), in paragraph 48 (application for payment
of tax to be postponed), after sub-paragraph (8) insert—

“(8A) Sub-paragraphs (8B) and (8C) apply where a person has been given
an accelerated payment notice under Chapter 3 of Part 4 of FA 2014
40and that notice has not been withdrawn.

(8B) Nothing in this paragraph enables the postponement of the payment
of (as the case may be)—

(a) the understated tax to which the payment specified in the
notice under section 213(2)(b) of that Act relates, or

(b) 45the disputed tax specified in the notice under section
214(2)(b) of that Act.

(8C) Accordingly, if the payment of an amount of tax within sub-
paragraph (8B)(b) is postponed by virtue of this paragraph
immediately before the accelerated payment notice is given, it ceases
to be so postponed with effect from the time that notice is given, and
5the tax is due and payable—

(a) if no representations were made under section 215 of that Act
in respect of the notice, on or before the last day of the period
of 90 days beginning with the day the notice is given, and

(b) if representations were so made, on or before whichever is
10later of—

(i) the last day of the 90 day period mentioned in
paragraph (a), and

(ii) the last day of the period of 30 days beginning with
the day on which HMRC’s determination in respect
15of those representations is notified under section 215
of that Act.”

(6) In paragraph 49 of that Schedule (agreement to postpone payment of tax), after
sub-paragraph (3) insert—

“(4) Sub-paragraphs (8A) to (8C) of paragraph 48 apply for the purposes
20of this paragraph as they apply for the purposes of paragraph 48.”

218 Protection of the revenue pending further appeals

(1) In section 56 of TMA 1970 (payment of tax where there is a further appeal),
after subsection (3) insert—

“(4) Subsection (5) applies where—

(a) 25an accelerated payment notice or partner payment notice has
been given to a party to the appeal under Chapter 3 of Part 4 of
the Finance Act 2014 (and not withdrawn), and

(b) the assessment has effect, or partly has effect, to counteract the
whole or part of the asserted advantage (within the meaning of
30section 212(3) of that Act) by reason of which the notice was
given.

(5) If, on the application of HMRC, the relevant court or tribunal considers
it necessary for the protection of the revenue, it may direct that
subsection (2) does not apply so far as the tax relates to the
35counteraction of the whole or part of the asserted advantage, and—

(a) give permission to withhold all or part of any repayment, or

(b) require the provision of adequate security before repayment is
made.

(6) “Relevant court or tribunal” means the tribunal or court from which
40permission or leave to appeal is sought.”

(2) In Schedule 10 to FA 2003 (SDLT: returns, enquiries, assessments and appeals),
in paragraph 43 (payment of stamp duty land tax where there is a further
appeal), after sub-paragraph (2) insert—

“(3) Sub-paragraph (4) applies where—

(a) 45an accelerated payment notice has been given to a party to
the appeal under Chapter 3 of Part 4 of the Finance Act 2014
(and not withdrawn), and

(b) the assessment to which the appeal relates has effect, or
partly has effect, to counteract the whole or part of the
asserted advantage (within the meaning of section 212(3) of
that Act) by reason of which the notice was given.

(4) 5If, on the application of HMRC, the relevant court or tribunal
considers it necessary for the protection of the revenue, it may direct
that sub-paragraph (1) does not apply so far as the stamp duty land
tax relates to the counteraction of the whole or part of the asserted
advantage, and—

(a) 10give permission to withhold all or part of any repayment, or

(b) require the provision of adequate security before repayment
is made.

(5) “Relevant court or tribunal” means the tribunal or court from which
permission or leave to appeal is sought.”

(3) 15In Schedule 33 to FA 2013 (annual tax on enveloped dwellings: returns,
enquiries, assessments and appeals), in paragraph 53 (payment of tax where
there is a further appeal), after sub-paragraph (2) insert—

“(3) Sub-paragraph (4) applies where—

(a) an accelerated payment notice has been given to a party to
20the appeal under Chapter 3 of Part 4 of FA 2014 (and not
withdrawn), and

(b) the assessment to which the appeal relates has effect, or
partly has effect, to counteract the whole or part of the
asserted advantage (within the meaning of section 212(3) of
25that Act) by reason of which the notice was given.

(4) If, on the application of HMRC, the relevant court or tribunal
considers it necessary for the protection of the revenue, it may direct
that sub-paragraph (1) does not apply so far as the tax relates to the
counteraction of the whole or part of the asserted advantage, and—

(a) 30give permission to withhold all or part of any repayment, or

(b) require the provision of adequate security before repayment
is made.

(5) “Relevant court or tribunal” means the tribunal or court from which
permission or leave to appeal is sought.”

35Penalties

219 Penalty for failure to pay accelerated payment

(1) This section applies where an accelerated payment notice is given by virtue of
section 212(2)(a) (notice given while tax enquiry is in progress) (and not
withdrawn).

(2) 40If any amount of the accelerated payment is unpaid at the end of the payment
period, P is liable to a penalty of 5% of that amount.

(3) If any amount of the accelerated payment is unpaid after the end of the period
of 5 months beginning with the penalty day, P is liable to a penalty of 5% of that
amount.

(4) If any amount of the accelerated payment is unpaid after the end of the period
of 11 months beginning with the penalty day, P is liable to a penalty of 5% of
that amount.

(5) “The penalty day” means the day immediately following the end of the
5payment period.

(6) Where section 216(6) (accelerated payment payable by instalments when it
relates to inheritance tax payable by instalments) applies to require an amount
of the accelerated payment to be paid before a later time than the end of the
payment period, references in subsections (2) and (5) to the end of that period
10are to be read, in relation to that amount, as references to that later time.

(7) Paragraphs 9 to 18 (other than paragraph 11(5)) of Schedule 56 to FA 2009
(provisions which apply to penalties for failures to make payments of tax on
time) apply, with any necessary modifications, to a penalty under this section
in relation to a failure by P to pay an amount of the accelerated payment as they
15apply to a penalty under that Schedule in relation to a failure by a person to
pay an amount of tax.

Withdrawal etc of accelerated payment notice

220 Withdrawal, modification or suspension of accelerated payment notice

(1) In this section a “Condition C requirement” means one of the requirements set
20out in Condition C in section 212.

(2) Where an accelerated payment notice has been given, HMRC may, at any time,
by notice given to P—

(a) withdraw the notice,

(b) where the notice is given by virtue of more than one Condition C
25requirement being met, withdraw it to the extent it is given by virtue of
one of those requirements (leaving the notice effective to the extent that
it was also given by virtue of any other Condition C requirement and
has not been withdrawn), or

(c) reduce the amount specified in the accelerated payment notice under
30section 213(2)(b) or 214(2)(b).

(3) Where—

(a) an accelerated payment notice is given by virtue of the Condition C
requirement in section 212(4)(a), and

(b) the follower notice to which it relates is withdrawn,

35HMRC must withdraw the accelerated payment notice to the extent it was
given by virtue of that requirement.

(4) Where—

(a) an accelerated payment notice is given by virtue of the Condition C
requirement in section 212(4)(a), and

(b) 40the follower notice to which it relates is amended under section
209(7)(b) (cases where there is a new relevant final judicial ruling
following a late appeal),

HMRC may by notice given to P make consequential amendments (whether
under subsection (2)(c) or otherwise) to the accelerated payment notice.

(5) 45Where—

(a) an accelerated payment notice is given by virtue of the Condition C
requirement in section 212(4)(b), and

(b) HMRC give notice under section 312(6) of FA 2004 with the result that
promoters are no longer under the duty in section 312(2) of that Act in
5relation to the chosen arrangements,

HMRC must withdraw the notice to the extent it was given by virtue of that
requirement.

(6) Subsection (7) applies where—

(a) an accelerated payment notice is withdrawn to the extent that it was
10given by virtue of a Condition C requirement,

(b) that requirement is the one stated in the notice for the purposes of
section 213(6) or 214(5) (calculation of amount of the accelerated
payment or of the denied advantage), and

(c) the notice remains effective to the extent that it was also given by virtue
15of any other Condition C requirement.

(7) HMRC must, by notice given to P—

(a) modify the accelerated payment notice so as to state the remaining, or
one of the remaining, Condition C requirements for the purposes of
section 213(6) or 214(5), and

(b) 20if the amount of the accelerated payment or (as the case may be) the
amount of the disputed tax determined on the basis of the substituted
Condition C requirement is less than the amount specified in the notice,
amend that notice under subsection (2)(c) to substitute the lower
amount.

(8) 25If a follower notice is suspended under section 209 (appeals against final
rulings made out of time) for any period, an accelerated payment notice in
respect of the follower notice is also suspended for that period.

(9) Accordingly, the period during which the accelerated payment notice is
suspended does not count towards the periods mentioned in the following
30provisions—

(a) section 216;

(b) section 55(8D) of TMA 1970;

(c) paragraph 39(11) of Schedule 10 to FA 2003;

(d) paragraph 48(8C) of Schedule 33 to FA 2013.

(10) 35But the accelerated payment notice is not suspended under subsection (8) if it
was also given by virtue of section 212(4)(b) or (c) and has not, to that extent,
been withdrawn.

(11) In a case within subsection (10), subsections (6) and (7) apply as they would
apply were the notice withdrawn to the extent that it was given by virtue of
40section 212(4)(a), except that any change made to the notice under subsection
(7) has effect during the period of suspension only.

(12) Where an accelerated payment notice is withdrawn, it is to be treated as never
having had effect (and any accelerated payment made in accordance with, or
penalties paid by virtue of, the notice are to be repaid).

(13) 45If, as a result of a modification made under subsection (2)(c), more than the
resulting amount of the accelerated payment has already been paid by P, the
excess must be repaid.

Partners and partnerships

221 Accelerated partner payments

Schedule 28 makes provision for accelerated partner payments and modifies
this Chapter in relation to partnerships.

5Defined terms

222 Defined terms used in Chapter 3

In this Chapter—

• “the accelerated payment” has the meaning given by section 216(2);

• “accelerated payment notice” has the meaning given by section 212(1);

• 10“arrangements” has the meaning given by section 194(4);

• “the asserted advantage” has the meaning given by section 212(3);

• “the chosen arrangements” has the meaning given by section 212(3),
  except in Schedule 28 where it has the meaning given by paragraph 3(3)
  of that Schedule;

• 15“the denied advantage” has the meaning given by section 213(5), except in
  paragraph 4 of Schedule 28 where it has the meaning given by
  paragraph 4(4) of that Schedule;

• “designated HMRC officer” means an officer of Revenue and Customs
  who has been designated by the Commissioners for the purposes of this
  20Part;

• “follower notice” has the meaning given by section 197(1);

• “HMRC” means Her Majesty’s Revenue and Customs;

• “P” has the meaning given by section 212(1);

• “partner payment notice” has the meaning given by paragraph 3 of
  25Schedule 28;

• “relevant tax” has the meaning given by section 193;

• “tax advantage” has the meaning given by section 194(2);

• “tax appeal” has the meaning given by section 196;

• “tax enquiry” has the meaning given by section 195(2).

CHAPTER 4 30Miscellaneous and general provision

Stamp duty land tax and annual tax on enveloped dwellings

223 Special case: stamp duty land tax

(1) This section applies to modify the application of this Part in the case of—

(a) a return or claim in respect of stamp duty land tax, or

(b) 35a tax appeal within section 196(g), or any appeal within section 196(i)
which derives from such an appeal.

(2) If two or more persons acting jointly are the purchasers in respect of the land
transaction—

(a) anything required or authorised by this Part to be done in relation to P
must be done in relation to all of those persons, and

(b) any liability of P in respect of an accelerated payment, or a penalty
under this Part, is a joint and several liability of all of those persons.

(3)
5Subsection (2) is subject to subsections (4) to (8).

(4) If the land transaction was entered into by or on behalf of the members of a
partnership—

(a) anything required or authorised to be done under this Part in relation
to P is required or authorised to be done in relation to all the
10responsible partners, and

(b) any liability of P in respect of an accelerated payment, or a penalty
under this Part, is a joint and several liability of the responsible
partners.

(5) But nothing in subsection (4) enables—

(a) 15an accelerated payment to be recovered from a person who did not
become a responsible partner until after the effective date of the
transaction in respect of which the tax to which the accelerated
payment relates is payable, or

(b) a penalty under this Part to be recovered from a person who did not
20become a responsible partner until after the time when the omission
occurred that caused the penalty to become payable.

(6) Where the trustees of a settlement are liable to pay an accelerated payment or
a penalty under this Part, the payment or penalty may be recovered (but only
once) from any one or more of the responsible trustees.

(7) 25But nothing in subsection (6) enables a penalty to be recovered from a person
who did not become a responsible trustee until after the time when the
omission occurred that caused the penalty to become payable.

(8) Where a follower notice or accelerated payment notice is given to more than
one person, the power conferred on P by section 200 or 215 is exercisable by
30each of those persons separately or by two or more of them jointly.

(9) In this section—

• “the accelerated payment” has the meaning given by section 216(2);

• “accelerated payment notice” has the meaning given by section 212(1);

• “effective date”, in relation to a land transaction, has the meaning given
  35by section 119 of FA 2003;

• “follower notice” has the meaning given by section 197(1);

• “the responsible partners”, in relation to a land transaction, has the
  meaning given by paragraph 6(2) of Schedule 15 to that Act;

• “the responsible trustees” has the meaning given by paragraph 5(3) of
  40Schedule 16 to that Act;

• “P”—

  (a)

  in relation to Chapter 2, has the meaning given by section
  197(1);

  (b)

  in relation to Chapter 3, has the meaning given by section 212.

224 45Special case: annual tax on enveloped dwellings

(1) This section applies to modify the application of this Part in the case of—

(a) a return or claim in respect of annual tax on enveloped dwellings, or

(b) a tax appeal within section 196(h), or any appeal within section 196(i)
which derives from such an appeal.

(2) If the responsible partners of a partnership are the chargeable person in
5relation to the tax to which the return or claim or appeal relates—

(a) anything required or authorised by this Part to be done in relation to P
must be done in relation to all of those partners, and

(b) any liability of P in respect of an accelerated payment, or a penalty
under this Part, is a joint and several liability of all of those persons.

(3) 10Where—

(a) a follower notice is given by virtue of a tax enquiry into the return or
claim or the appeal, and

(b) by virtue of section 97 or 98 of FA 2013, two or more persons would
have been jointly and severally liable for an additional amount of tax
15had the necessary corrective action been taken before the specified time
for the purposes of section 201,

any liability of P in respect of a penalty under that section is a joint and several
liability of all of them.

(4) Where—

(a) 20an accelerated payment notice is given by virtue of a tax enquiry into
the return or claim or the appeal, and

(b) two or more persons would, by virtue of section 97 or 98 of FA 2013, be
jointly and severally liable for the understated tax relating to the
accelerated payment specified in the notice or (as the case may be) the
25disputed tax specified in the notice,

any liability of P in respect of the accelerated payment or a penalty under
section 219 is a joint and several liability of all of them.

(5) Accordingly—

(a) where a follower notice is given in a case where subsection (3) applies,
30or

(b) an accelerated payment notice is given in a case to which subsection (4)
applies,

HMRC must also give a copy of the notice to any other person who would be
jointly and severally liable for a penalty or payment, in relation to the notice,
35by virtue of this section.

(6) Where a follower notice or accelerated payment notice is given to more than
one person, the power conferred on P by section 200 or 215 is exercisable by
each of those persons separately or by two or more of them jointly.

(7) In this section—

• 40“the accelerated payment” has the meaning given by section 216(2);

• “accelerated payment notice” has the meaning given by section 212(1);

• “the chargeable person” has the same meaning as in Part 3 of FA 2013
  (annual tax on enveloped dwellings);

• “follower notice” has the same meaning as in Chapter 2;

• 45“P”—

  (a)

  in relation to Chapter 2, has the meaning given by section
  197(1);

  (b)

  in relation to Chapter 3, has the meaning given by section 212;

Finance BillPage 150

• “the responsible partners” has the same meaning as in Part 3 of FA 2013
  (annual tax on enveloped dwellings).

Extension of Part by order

225 Extension of this Part by order

(1) 5The Treasury may by order amend section 193 (definition of “relevant tax”) so
as to extend this Part to any other tax.

(2) An order under this section may include—

(a) provision in respect of that other tax corresponding to the provision
made by sections 217 and 218,

(b) 10consequential and supplemental provision, and

(c) transitional and transitory provision and savings.

(3) For the purposes of subsection (1) or (2) an order under this section may amend
this Part (other than this section) or any other enactment whenever passed or
made.

(4) 15The power to make orders under this section is exercisable by statutory
instrument.

(5) An order under this section may only be made if a draft of the instrument
containing the order has been laid before and approved by a resolution of the
House of Commons.

(6) 20In this section “tax” includes duty.

Consequential amendments

226 Consequential amendments

Schedule 29 contains consequential amendments.

Part 5 25Promoters of tax avoidance schemes

Introduction

227 Meaning of “relevant proposal” and “relevant arrangements”

(1) “Relevant proposal” means a proposal for arrangements which (if entered into)
would be relevant arrangements (whether the proposal relates to a particular
30person or to any person who may seek to take advantage of it).

(2) Arrangements are “relevant arrangements” if—

(a) they enable, or might be expected to enable, any person to obtain a tax
advantage, and

(b) the main benefit, or one of the main benefits, that might be expected to
35arise from the arrangements is the obtaining of that advantage.

(3) “Tax advantage” includes—

(a) relief or increased relief from tax,

(b) repayment or increased repayment of tax,

(c) avoidance or reduction of a charge to tax or an assessment to tax,

(d) avoidance of a possible assessment to tax,

(e) 5deferral of a payment of tax or advancement of a repayment of tax, and

(f) avoidance of an obligation to deduct or account for tax.

(4) “Arrangements” includes any agreement, scheme, arrangement or
understanding of any kind, whether or not legally enforceable, involving a
single transaction or two or more transactions.

228 10Carrying on a business “as a promoter”

(1) A person carrying on a business in the course of which the person is, or has
been, a promoter in relation to a relevant proposal or relevant arrangements
carries on that business “as a promoter”.

(2) A person is a “promoter” in relation to a relevant proposal if the person—

(a) 15is to any extent responsible for the design of the proposed
arrangements,

(b) makes a firm approach to another person in relation to the relevant
proposal with a view to making the proposal available for
implementation by that person or any other person, or

(c) 20makes the relevant proposal available for implementation by other
persons.

(3) A person is a “promoter” in relation to relevant arrangements if the person—

(a) is by virtue of subsection (2)(b) or (c), a promoter in relation to a
relevant proposal which is implemented by the arrangements, or

(b) 25is responsible to any extent for the design, organisation or management
of the arrangements.

(4) For the purposes of this Part a person makes a firm approach to another person
in relation to a relevant proposal if—

(a) the person communicates information about the relevant proposal to
30the other person at a time when the proposed arrangements have been
substantially designed,

(b) the communication is made with a view to that other person or any
other person entering into transactions forming part of the proposed
arrangements, and

(c) 35the information communicated includes an explanation of the tax
advantage that might be expected to be obtained from the proposed
arrangements.

(5) For the purposes of subsection (4) proposed arrangements have been
substantially designed at any time if by that time the nature of the transactions
40to form them (or part of them) has been sufficiently developed for it to be
reasonable to believe that a person who wished to obtain the tax advantage
mentioned in subsection (4)(c) might enter into—

(a) transactions of the nature developed, or

(b) transactions not substantially different from transactions of that nature.

(6) 45A person is not a promoter in relation to a relevant proposal or relevant
arrangements by reason of anything done in prescribed circumstances.

(7) Regulations under subsection (6) may contain provision having retrospective
effect.

229 Meaning of “intermediary”

For the purposes of this Part a person (“A”) is an intermediary in relation to a
5relevant proposal if—

(a) A communicates information about the relevant proposal to another
person in the course of a business,

(b) the communication is made with a view to that other person, or any
other person, entering into transactions forming part of the proposed
10arrangements, and

(c) A is not a promoter in relation to the relevant proposal.

Conduct notices

230 Duty to give conduct notice

(1) Subsections (5) to (9) apply if an authorised officer becomes aware at any time
15that a person (“P”) who is carrying on a business as a promoter—

(a) has, in the period of 3 years ending with that time, met one or more
threshold conditions, and

(b) was carrying on a business as a promoter when P met that condition.

(2) Part 1 of Schedule 30 sets out the threshold conditions and describes how they
20are met.

(3) Part 2 of that Schedule contains provision about the meeting of threshold
conditions by bodies corporate.

(4) See also Schedule 32 (which contains provision about the meeting of threshold
conditions and other conditions by partnerships).

(5) 25The authorised officer must determine whether or not P’s meeting of the
condition mentioned in subsection (1)(a) (or, as the case requires, P’s meeting
of all those conditions, taken together) should be regarded as significant in
view of the purposes of this Part.

(6) Subsection (5) does not apply if a conduct notice or a monitoring notice already
30has effect in relation to P.

(7) If the authorised officer determines under subsection (5) that P’s meeting of the
condition or conditions in question should be regarded as significant, the
officer must give P a conduct notice, unless subsection (8) applies.

(8) This subsection applies if the authorised officer determines that, having regard
35to the extent of the impact that P’s activities as a promoter are likely to have on
the collection of tax, it is inappropriate to give P a conduct notice.

(9) The authorised officer must determine under subsection (5) that the meeting of
the condition (or all the conditions) mentioned in subsection (1)(a) should be
regarded as significant if the condition (or any of the conditions) is in any of the
40following paragraphs of Schedule 30—

(a) paragraph 2 (deliberate tax defaulters);

(b) paragraph 3 (breach of Banking Code of Practice);

(c) paragraph 4 (dishonest tax agents);

(d) paragraph 6 (persons charged with certain offences);

(e) paragraph 7 (opinion notice of GAAR Advisory Panel).

231 Contents of a conduct notice

(1) A conduct notice is a notice requiring the person to whom it has been given
5(“the recipient”) to comply with conditions specified in the notice.

(2) Before deciding on the terms of a conduct notice, the authorised officer must
give the person to whom the notice is to be given an opportunity to comment
on the proposed terms of the notice.

(3) A notice may include only conditions that it is reasonable to impose for any of
10the following purposes—

(a) to ensure that the recipient provides adequate information to its clients
about relevant proposals, and relevant arrangements, in relation to
which the recipient is a promoter;

(b) to ensure that the recipient provides adequate information about
15relevant proposals in relation to which it is a promoter to persons who
are intermediaries in relation to those proposals;

(c) to ensure that the recipient does not fail to comply with any duty under
a specified disclosure provision;

(d) to ensure that the recipient does not discourage others from complying
20with any obligation to disclose to HMRC information of a description
specified in the notice;

(e) to ensure that the recipient does not enter into an agreement with
another person (“C”) which relates to a relevant proposal or relevant
arrangements in relation to which the recipient is a promoter, on terms
25which—

(i) impose a contractual obligation on C which falls within
paragraph 11(2) or (3) of Schedule 30 (contractual terms
restricting disclosure), or

(ii) impose on C obligations within both paragraph 11(4) and (5) of
30that Schedule (contractual terms requiring contribution to
fighting funds and restricting settlement of proceedings);

(f) to ensure that the recipient does not promote relevant proposals or
relevant arrangements which rely on, or involve a proposal to rely on,
one or more contrived or abnormal steps to produce a tax advantage;

(g) 35to ensure that the recipient does not fail to comply with any stop notice
which has effect under paragraph 12 of Schedule 30.

(4) References in subsection (3) to ensuring that adequate information is provided
about proposals or arrangements include—

(a) ensuring the adequacy of the description of the arrangements or
40proposed arrangements;

(b) ensuring that the information includes an adequate assessment of the
risk that the arrangements or proposed arrangements will fail;

(c) ensuring that the information does not falsely state, and is not likely to
create a false impression, that HMRC have (formally or informally)
45considered, approved or expressed a particular opinion in relation to
the proposal or arrangements.

(5) In subsection (3)(c) “specified disclosure provision” means a disclosure
provision that is specified in the notice; and for this purpose “disclosure
provision” means any of the following—

(a) section 308 of FA 2004 (disclosure of tax avoidance schemes: duties of
5promoter);

(b) section 312 of FA 2004 (duty of promoter to notify client of number);

(c) sections 313ZA and 313ZB of FA 2004 (duties to provide details of
clients and certain others);

(d) Part 1 of Schedule 36 to FA 2008 (duties to provide information and
10produce documents).

(6) In subsection (4)(b) “fail”, in relation to arrangements or proposed
arrangements, means not result in a tax advantage which the arrangements or
(as the case may be) proposed arrangements might be expected to result in.

(7) The Treasury may by regulations amend the definition of “disclosure
15provision” in subsection (5).

232 Section 231: supplementary

(1) In section 231 the following expressions are to be interpreted as follows.

(2) “Adequate” means adequate having regard to what it might be reasonable for
a client or (as the case may be) an intermediary to expect; and “adequacy” is to
20be interpreted accordingly.

(3) A person (“C”) is a “client” of a promoter, if at any time when a conduct notice
has effect, the promoter—

(a) makes a firm approach to C in relation to a relevant proposal with a
view to the promoter making the proposal available for
25implementation by C or another person;

(b) makes a relevant proposal available for implementation by C;

(c) takes part in the organisation or management of relevant arrangements
entered into by C.

(4) The recipient of a conduct notice “promotes” a relevant proposal if it—

(a) 30takes part in designing the proposal,

(b) makes a firm approach to a person in relation to the proposal with a
view to making the proposal available for implementation by that
person or another person, or

(c) makes the proposal available for implementation by persons (other
35than the recipient).

(5) The recipient of a conduct notice “promotes” relevant arrangements if it takes
part in designing, organising or managing the arrangements.

233 Amendment or withdrawal of conduct notice

(1) This section applies where a conduct notice has been given to a person.

(2) 40An authorised officer may at any time amend the notice.

(3) An authorised officer—

(a) may withdraw the notice if the officer thinks it is not necessary for it to
continue to have effect, and

(b) in considering whether or not that is necessary must take into account
the person’s record of compliance, or failure to comply, with the
conditions in the notice.

234 Duration of conduct notice

(1) 5A conduct notice has effect from the date specified in it as its commencement
date.

(2) A conduct notice ceases to have effect—

(a) at the end of the period of two years beginning with its commencement
date, or

(b) 10if an earlier date is specified in it as its termination date, at the end of
that day.

(3) A conduct notice ceases to have effect if withdrawn by an authorised officer
under section 233.

(4) A conduct notice ceases to have effect in relation to a person when a
15monitoring notice takes effect in relation to that person.

Monitoring notices: procedure and publication

235 Monitoring notices: duty to apply to tribunal

(1) If—

(a) a conduct notice has effect in relation to a person who is carrying on a
20business as a promoter, and

(b) an authorised officer determines that the person has failed to comply
with one or more conditions in the notice,

the authorised officer must apply to the tribunal for approval to give the
person a monitoring notice.

(2) 25An application under subsection (1) must include a draft of the monitoring
notice.

(3) Subsection (1) does not apply if—

(a) the condition (or all the conditions) mentioned in subsection (1)(b) were
imposed under subsection (3)(a), (b) or (c) of section 231, and

(b) 30the authorised officer considers that the failure to comply with the
condition (or all the conditions, taken together) is such a minor matter
that it should be disregarded for the purposes of this section.

(4) Where an authorised officer makes an application to the tribunal under
subsection (1), the officer must at the same time give notice to the person to
35whom the application relates.

(5) The notice under subsection (4) must state which condition (or conditions) the
authorised officer has determined under subsection (1)(b) that the person has
failed to comply with and the reasons for that determination.

236 Monitoring notices: tribunal approval

(1) 40On an application under section 235, the tribunal may approve the giving of a
monitoring notice only if—

(a) the tribunal is satisfied that, in the circumstances, the authorised officer
would be justified in giving the monitoring notice, and

(b) the person to whom the monitoring notice is to be given (“the affected
person”) has been given a reasonable opportunity to make
5representations to the tribunal.

(2) The tribunal may amend the draft notice included with the application under
section 235.

(3) If the representations that the affected person makes to the tribunal include a
statement that in the affected person’s view it was not reasonable to include the
10condition mentioned in section 235(1)(b) in the conduct notice, the tribunal
must refuse to approve the giving of the monitoring notice if it is satisfied that
it was not reasonable to include that condition (but see subsection (4)).

(4) If the representations made to the tribunal include the statement described in
subsection (3) and the determination under section 235(1)(b) is a determination
15that there has been a failure to comply with more than one condition in the
conduct notice—

(a) subsection (3) does not apply, but

(b) in deciding whether or not to approve the giving of the monitoring
notice, the tribunal is to assume, in the case of any condition that the
20tribunal considers it was not reasonable to include in the conduct
notice, that there has been no failure to comply with that condition.

237 Monitoring notices: content and issuing