The guidance supports the STAR legislation in Schedule 18 of Finance Act 2016 which is is part of a range of 
measures to clamp down on tax avoidance. It aims to change the behaviour of those who engage in tax avoidance and to discourage them from using avoidance arrangements in the future. It imposes a range of sanctions, which can include penalties, on anyone who uses avoidance arrangements to reduce their tax liability, but on which they later have to pay some or all of the tax they tried to avoid.
The legislation doesn’t just apply to persistent avoiders, it can apply to taxpayers who have used only one avoidance arrangement that has been defeated. It does affect all new avoidance arrangements entered into on or after 15 September 2016 and defeated after that date and may affect existing avoidance arrangements entered into before 15 September 2016 but defeated after 5 April 2017.
STAR applies to relevant defeats of arrangements which are covered by the legislative regimes for the general anti abuse rule (‘GAAR’), follower notices, disclosure of tax avoidance schemes (‘DOTAS’) or Disclosure of tax Avoidance Schemes: VAT and Other Indirect Taxes (‘DASVOIT’), or its predecessor VAT Avoidance Disclosure Regime (‘VADR’).
The STAR regime is all-encompassing and forms part of HMRC’s pro-active approach to dealing with tax avoidance and evasion. The full document can be found on the .Gov website.
If you or your clients want to explore the settlement option for past tax planning arrangements we strongly advise that you talk to us before approaching HMRC to resolve this matter. In our experience, the calculations prepared by HMRC are unlikely to be the most advantageous for your clients.
If you’d like to have an initial conversation do get in touch with us on 0115 778 8533 or email hello@bedrocktax.co.uk You can also find further information about our approach to managing settlement cases here
