Today the Exchequer Secretary, David Gauke MP, has announced a
consultation, entitled "Lifting the Lid on Tax Avoidance
Schemes", on extending HMRC's powers to tackle abusive and
artificial avoidance schemes. The new proposals include: possible
wider and more detailed publication of the details of avoidance
schemes and their promoters and a tightening of the regime for the
disclosure of tax avoidance schemes (DOTAS) including new hallmarks
for disguised remuneration schemes and schemes involving financial
products to reduce corporation tax liabilities.
The revision of the DOTAS regime has been discussed for some
time. At the time of the Budget, the Government promised a
consultation on the extension of DOTAS hallmarks. The Government
has taken the opportunity to announce some additional measures to
demonstrate its commitment to tackling aggressive tax avoidance
schemes and their promoters. It also allowed the Exchequer
Secretary to indulge in some anti-scheme promoter rhetoric. For the
most part, mainstream tax advisers will welcome the attack on
mass-marketed schemes. But there will always be some sense of
unease. It all turns on the definitions. The Exchequer Secretary
acknowledges "For the taxpayer, there may be times when it is
not clear if an arrangement is legitimate tax planning or contrived
avoidance." He continues, "It is up to us as Government
to make clear the features of dodgy schemes". But he knows
that it is a very difficult thing to achieve. The current proposal
for a General Anti-Abuse Rule (GAAR) fails to do so. It merely asks
whether an arrangement is "reasonable" a concept which
itself is open to widely differing interpretation.
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