The CIOT has warned HMRC against creating a new strict liability criminal offence for failing to disclose notifiable arrangements under the disclosure of tax avoidance schemes (DOTAS) regime without a reasonable excuse.

DOTAS is much too wide in its current formulation to be suitable for a criminal offence, and applying the proposed offence to all the DOTAS hallmarks seems excessive, especially since the proposal is intended to be a response to specific issues with disguised remuneration mass-marketed tax avoidance schemes.

A DOTAS hallmark is a feature of a tax arrangement that must be disclosed to HMRC because it suggests potential tax avoidance, and the rules are set out in legislation.