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ACCA Strategic Professional · Advanced Taxation (UK) · Ethical and professional issues arising from the giving of tax planning advice

Dev has used a scheme disclosed under DOTAS. Which statement about his obligations is correct?

Dev must report the scheme reference number on his tax return for the period where the scheme gives a tax advantage. Failure to do so risks a penalty. Promoters are not the only party with duties, because users must also report the number to HMRC.

  1. AHe must include the scheme reference number on his tax return for the relevant period, and not doing so can lead to a penaltyCorrect
  2. BHe need take no action because only the promoter has duties under DOTAS
  3. CHe must submit the scheme reference number to HMRC only if the scheme is later challenged
  4. DThe scheme reference number is needed only for VAT, not direct taxes

Explanation

Once a scheme has a scheme reference number, the promoter gives it to clients, who must report it on their tax returns for the periods in which they obtain the advantage. Failure to do so can result in a penalty. The suggestion that only the promoter has duties is wrong because users also have a reporting duty.

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