The Promoters of Tax Avoidance Schemes (POTAS) legislation was introduced in Finance Act 2014 following consultation. It allows HMRC to issue these promoters identified as ‘high risk’ with conduct notices requiring them to change their behaviour.

HMRC has already issued one such conduct notice to a promoter.

If a promoter does not comply with the terms of a conduct notice they can be issued with a tougher monitoring notice, which, among other things, will mean the promoter will be publicly named by HMRC; and will have to tell their clients that they are being monitored.

Regulations laid before Parliament last week outline the requirements for promoters who are being monitored. They will be required to disclose their monitored status on any publications or correspondence to current or prospective clients and intermediaries, professional bodies and regulatory authorities.

The new rules state this information has to appear ‘in a prominent position’ on the monitored promoter’s or other websites promoting, or providing information on, the activities of the promoter, as well as on any audio visual materials. It is required to be legible and ‘not in any way be concealed’.

Failure to comply with the conditions of a monitoring notice could result in a promoter facing fines of up to £1m.

David Gauke, financial secretary to the Treasury, said: ‘Our tough new rules will force high risk promoters to change their behaviour and help protect taxpayers from unscrupulous advice. Promoters who do not change their ways should be in no doubt – HMRC is taking swift and decisive action to use these new rules.’

Gauke said HMRC has already written to a number of promoters warning them of the consequences if they do not change their behaviour, as well as issuing the first conduct notice.

Details of the monitoring regulations are here: http://www.legislation.gov.uk/uksi/2015/549/introduction/made