Government announces tax avoidance clampdown
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Issued on 06 December 2010 - HM Treasury
David Gauke, Exchequer Secretary to
the Treasury, has today announced a number of changes to legislation to
tackle tax avoidance. Some of these changes will take immediate
Together, these announcements will
protect forecast revenues estimated at up to £5billion over the next 4
years, and are expected to raise over £2billion in additional revenue
during the course of this parliament.
These measures take the necessary
steps to protect the Exchequer, and maintain fairness for the taxpayer,
whilst providing certainty for businesses whose investment will
encourage the re-balancing of the economy and job creation.
Two measures with immediate effect
will tackle tax avoidance by:
preventing groups of companies
using intra-group loans or derivatives, to reduce the groupís tax bill,
addressing schemes where a
company does not fully recognise certain amounts in its accounts
involving loans and derivatives
Three measures with further detail to
be set out shortly, will tackle tax avoidance through:
addressing the practice of
stopping investment companies
retrospectively changing the currency they prepare their accounts in
for tax purposes, and,
tackling businesses who
artificially split the supply of services to reduce VAT.
In addition to these measures, the
Exchequer Secretary has asked Graham Aaronson QC to lead a study into a
General Anti Avoidance Rule (GAAR). This study will consider whether a
GAAR could deter and counter tax avoidance, whilst providing certainty,
retaining a tax regime that is attractive to businesses, and minimising
costs for businesses and HMRC. The Government is committed to
predictability and stability for the UK tax system, and would not
introduce a GAAR without further formal public consultation
As set out in the June Budget, the
Government is committed to tackling tax avoidance, and has been clear
that it will build in sustainable defences to address long-standing
The Government's response to
significant avoidance risks will be balanced with its commitment to
improving predictability and stability in the tax system. The
Government will publish on 9 December a draft Protocol that will set
out the circumstances in which it will consider changing legislation
with immediate effect.
ministerial statement on anti-avoidance.
2. Further details on the
individual measures can be found on HMRCís website (opens in new browser window).
3. The measures announced today
are expected to raise £2billion over the course of the Parliament in
additional revenue. They will also prtect forecast revenues estimated
at up to £5billion over the next 4 years. These are current estimates
of the impact of these measures. Full details on the costing of these
measures will be certified by the OBR at at Budget 2011.
4. HMRC has today published a document
in response to the consultation on bringing inheritance tax on
transfers of property into trust within the tax avoidance disclosure
regime (DOTAS). The necessary regulations, taking into account those
changes will come into effect on 6th April.
study into a GAAR led by Graham Aaronson QC, will complete its work by
31st October 2011, and inform Ministers of its
6. The Spending Review invested £900million over the next 4
years to transform HMRCís work against avoidance, evasion and criminal
attack to bring in extra tax revenue of £7billion a year by 2014/15.
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Article Published/Sorted/Amended on Scopulus 2010-12-07 16:22:56 in Tax Articles