Section 61WA — Income Tax (Earnings and Pensions) Act 2003: Anti-avoidance

Anti-avoidance 61WA 1 This section applies if in any case at least one relevant person in a chain participates in a relevant avoidance arrangement.

2 An arrangement is a “relevant avoidance arrangement” if its main purpose, or one of its main purposes, is to secure a tax advantage by securing that at least one of the conditions mentioned in section 61O or 61P is not met in relation to an intermediary.

3 Section 61N(3) has effect as if the reference to the fee-payer were a reference to the participating person, but—

a section 61N(4) continues to have effect as if the reference to the fee-payer were a reference to the deemed employer, and b Step 1 of section 61Q(1) continues to have effect as referring to the chain payment made by the deemed employer.

4 The participating person is—

a in a case where only one relevant person participates in the arrangement, that person;

b in any other case the highest relevant person in the chain who participated in the arrangement and from whom HMRC considers there is a realistic prospect of recovering, within a reasonable period, the amount of tax that would have been paid (or not repaid) in the absence of the arrangement.

5 Subsection (3) has effect even though that may involve a participating person being treated as both employer and employee in relation to the deemed employment under section 61N(3).

6 In this section— “ arrangement ” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable); “ deemed employer ” means a person who would, but for this section, be treated by section 61N(3) as making a payment to the worker; “ relevant person ” means— the worker; a person who is resident in the United Kingdom or who has a place of business in the United Kingdom; “ tax ” means income tax (and “ tax advantage ” is to be construed accordingly”); “ tax advantage ” includes— avoidance or reduction of a charge to tax or an assessment to tax, repayment or increased repayment of tax, avoidance of a possible assessment to tax, and deferral of a payment of tax or advancement of a repayment of tax.