The National Audit Office published the above report which was tasked at examining the effectiveness of the UK's Disclosure of Tax Avoidance Schemes (DOTAS) regime and HMRC's response to marketed tax avoidance schemes, particularly those used by large numbers of individuals and smaller businesses.

The executive summary of the report is premised around the following key message:-

• “HMRC must push harder to find an effective way to tackle the promoters and users of the most aggressive tax avoidance schemes. Though its disclosure regime has helped to change the market, it has had little impact on the persistent use of highly contrived schemes which deprives the public purse of billions of pounds”

The report mentions that in each of the last four years, over 100 new avoidance schemes have been disclosed under DOTAS. While HMRC believes most of these would be defeated if tested in the courts, there is no evidence that their usage is reducing, according to the report.

The report also cites a figure of £10.2bn as HMRC's estimate of the tax at risk from avoidance schemes it is investigating that are used by individuals and smaller companies – slightly (but not hugely) different to figures HMRC itself cited in the recent Tax Gap publication.

Probably not surprisingly, resources are referred to as being a key requirement to tackle this given that the process can take many years and often requires litigation. The report also details 41,000 open avoidance cases relating to marketed schemes used by individuals and small businesses, and a lack of a plan from HMRC to demonstrate how this number will be reduced.

It is likely that this is where the proposed General Anti Abuse Rule legislation due to have effect next April will come into play. In addition, changes are proposed to the existing DOTAS regime to extend its reach with revisions and extensions to the existing hallmarks. The consultation for these proposals is now closed.