The study group, which was led by commercial tax barrister, Graham Anderson QC, was made up of influential tax lawyers and barristers, was tasked with investigating the feasibility of introducing a GAAR in the UK. http://international-adviser.com/11126/gaar-panel-members-named
It has now concluded that introducing a narrowly-focused GARR would:
- deter abusive tax avoidance schemes;
- contribute to providing a more level playing field for business;
- reduce legal uncertainty around tax avoidance schemes;
- help build trust between taxpayers and Her Majesty’s Revenue and Customs; and
- offer opportunities to simplify the tax system.
The group however, warned against introducing a “broad spectrum general anti-avoidance rule”.
The report recommends that the general anti-abuse rule should initially apply to the main direct taxes – income tax, capital gains tax, corporation tax and petroleum revenue tax – as well as national insurance contributions. The report sets out in detail how the rule could be introduced and includes an illustrative draft rule. It also includes a summary of the views given by representative bodies from the tax sector.
Publishing the report Anderson said: “A general anti-abuse rule narrowly targeted to deter such schemes, while not affecting responsible tax planning, should lead to a fairer, more principled and ultimately simpler tax system; and I strongly recommend that such a rule should be introduced into our tax laws.”
In response, David Gauke, exchequer secretary to the Treasury, said the treasury will “carefully consider [the group’s] recommendations”.
