Anti-avoidance measures back in the spotlight to help plug the
deficit
Today's Emergency Budget has outlined various anti-avoidance
measures which aim to collect much needed revenue by bringing back
into the spotlight the discussion on introducing a General Anti
Avoidance Rule (GAAR), to clamp down on tax planning arrangements,
says leading business and financial advisers Grant Thornton.
"The Coalition Government has decided it will take a more
strategic approach to anti avoidance measures to prevent increasing
complexity, and reduce the need for frequent legislative change.
Successive governments have considered, but not introduced, a GAAR,
but this is now firmly back on the Coalition Government's agenda. A
consultation process will consider how and when such measures
should be introduced," says Paul Roberts, Head of Tax
Investigations at Grant Thornton.
"Additionally, the Disclosure of Tax Schemes arrangements (where
promoters of tax schemes must notify HMRC when a new planning
arrangement is developed) will be beefed up in 2011/12 to catch
more tax avoidance arrangements, including Inheritance Tax
planning," continues Roberts.
Areas which will be first in the firing line for review are
likely to be:
- planning relating to General Growth and Employment Related
Securities;
- schemes exploiting large gifts to charities for tax
reasons;
- and avoidance involving the use of trusts and other vehicles
to shelter pension income.
"The Liberal Democrats made play during the election campaign of
their belief that large revenues may be raised from clamping down
on tax loopholes and tax avoidance schemes. However, detailed rules
restricting aggressive tax planning already exist in the UK and the
"large sums" the Coalition Government believes it will find to help
bridge the deficit gap are unlikely to be realised in a hurry",
continues Roberts.
"There was disappointingly little included within the emergency
budget relating to tackling large scale non compliance and tax
evasion. What they are doing is to tighten up around the edges and
deal with persistent and deliberate non payers by bringing in
private sector debt collectors to pursue the collection of all tax
debts. This will include compulsory deposits for PAYE and NIC with
the objective of collecting £140 million which is currently not
being paid over to the Treasury.
However, the likely public sector cuts due to take place mean
Her Majesty's Revenue & Customs will be at full stretch,
resulting in the need to outsource some services to achieve their
tax collection targets," concludes Roberts.
ENDS
For further information please contact:
Paul Roberts on 0207 728 2777 or
paul.roberts@gtuk.com
Suvra Datta at Grant Thornton press office on 0207 728
2375 or on suvra.datta@gtuk.com
Notes to Editors:
Live Webinar
We will be running a live interactive internet seminar (webinar)
at 4.00pm on June 24, with a panel of experts who will be
commenting on what the announcement means for the UK economy, taxes
and the public sector. Viewers will be able to email questions in
to the live discussion.
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