Government appoints GAAR advisory panel

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The government said it will appoint an interim advisory group to help it write a new General Anti-Abuse Rule (GAAR) aimed at tackling egregious tax avoidance schemes.

In next March's Budget, the government said that a GAAR Advisory Panel would give opinions on specific cases and approve HMRC guidance on the new rule.

HMRC said it hopes to have appointed a chair of the panel by early next year. Before then an interim group of panel members led by Graham Aaronson QC will oversee the development of the new guidance, after it is published for public consultation in December.

In 2011, a report led by Aaronson recommended a "narrowly focussed" GAAR, which he said would deter abusive tax avoidance and explain what types of avoidance schemes are unacceptable and covered by the rule.

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Nick Huber
Freelance journalist
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20th Nov 2012 16:57

What is an

artificial avoidance scheme? If it's not tax avoidance it must be tax evasion. Again we will have the problem of legallity. It is up to the law to decide what is legal not GAAR's. However if sticks to what is intended ie. re-classifying some tax avoidance schemes that do nothing but save tax into tax evasion, then that can't be a bad thing. Like all these good ideas though it will end up hitting normal business transactions when the big boys start spending mega money on court costs to win.

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20th Nov 2012 19:48

How about

a plumber who deliberately keeps his turnover under the VAT threshold by getting his customers to buy all materials.

My view good tax planning to avoid having to pay VAT. Certainly legal but would this come under GAAR. You bet your sweet life it will.

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20th Nov 2012 19:52

And the point of all this is?

Surely all a GAAR means is cases going to the tribunals and courts for interpretation as to whether they are 'artificial'... which is what happens already where the arrangements are looked at using the Ramsay doctrine.

Or perhaps this will just mean even more such cases going through that process, and thus more work for Mr Aaronson's learned friends? [/cynicism]

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20th Nov 2012 20:22

The point,

as I see it, is to get concencus amongst ourselves and the "experts" as to what should be in the GAAR. That way any scheme would automatically be vetoed so no need for courts etc.

Then, I would presume, it gets updated as new unpopular schemes become invented.

I really can't see how it will work.

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By markfd
22nd Nov 2012 02:49

Target properly...

...surely after how ever many years of disclosure of avoidance scheme, HMRC could define some properly targeted anti-avoidance provisions eg loss relief limited to lesser of losses per tax regulations and actual economic loss suffered by taxpayer and a similar action on the other side on benefits.

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