A union representing senior HMRC staff has questioned the government’s commitment to tackling ‘tax avoidance by big business and the wealthy’.
The Association of Revenue and Customs (ARC) said the government’s proposed general anti-avoidance rule, and the concept of ‘responsible’ tax planning, may ‘widen perceptions of what is responsible tax planning and so make it harder to tackle avoidance’.
The government announced at Budget 2012 that it intends to consult in June on a ‘general anti-buse rule’ targeted at ‘artificial and abusive’ schemes, as recommend by Graham Aaronson’s report for HM Treasury. ARC said such a rule would ‘encourage the view that any arrangement not caught by the “narrow” GAAR is responsible tax planning’.
The proposed advisory panel would cause taxpayers additional uncertainty and delay and conflict with the current judicial process for appeal, ARC suggested.
‘Like HM Government, ARC wants to tackle avoidance (very conservatively estimated at £5bn each year),’ it said. ‘We recommend instead a wider GAAR, fully resourced and able to provide taxpayers with clearances so as to provide more and early certainty on how HMRC views transactions. A narrow GAAR may otherwise serve to legitimise what is currently held to be avoidance. In other words, under the guise of tackling avoidance, it may actually facilitate it.’
The CIOT and ATT warned in February that the proposed GAAR would not solve ‘the high-profile problems’ identified in the tax system. In a joint submission to HMRC, the tax bodies said it was ‘very telling’ that Private Eye had recognised that a GAAR would not meet the aims of the politicians and would ‘disappoint public opinion’.
Private Eye had observed that a general anti-abuse power would not touch ‘big-time offshore avoidance’ that was considered ‘mere planning’.
A union representing senior HMRC staff has questioned the government’s commitment to tackling ‘tax avoidance by big business and the wealthy’.
The Association of Revenue and Customs (ARC) said the government’s proposed general anti-avoidance rule, and the concept of ‘responsible’ tax planning, may ‘widen perceptions of what is responsible tax planning and so make it harder to tackle avoidance’.
The government announced at Budget 2012 that it intends to consult in June on a ‘general anti-buse rule’ targeted at ‘artificial and abusive’ schemes, as recommend by Graham Aaronson’s report for HM Treasury. ARC said such a rule would ‘encourage the view that any arrangement not caught by the “narrow” GAAR is responsible tax planning’.
The proposed advisory panel would cause taxpayers additional uncertainty and delay and conflict with the current judicial process for appeal, ARC suggested.
‘Like HM Government, ARC wants to tackle avoidance (very conservatively estimated at £5bn each year),’ it said. ‘We recommend instead a wider GAAR, fully resourced and able to provide taxpayers with clearances so as to provide more and early certainty on how HMRC views transactions. A narrow GAAR may otherwise serve to legitimise what is currently held to be avoidance. In other words, under the guise of tackling avoidance, it may actually facilitate it.’
The CIOT and ATT warned in February that the proposed GAAR would not solve ‘the high-profile problems’ identified in the tax system. In a joint submission to HMRC, the tax bodies said it was ‘very telling’ that Private Eye had recognised that a GAAR would not meet the aims of the politicians and would ‘disappoint public opinion’.
Private Eye had observed that a general anti-abuse power would not touch ‘big-time offshore avoidance’ that was considered ‘mere planning’.
