Press Room
Tax simplification may be GAAR in disguise
Tuesday 9 October 2007
The 'tax simplification' discussed in today's Pre-Budget Report may
lead to new proposals to introduce a General Anti-Avoidance Rule
(GAAR), according to tax experts Grant Thornton.
Chancellor Alistair Darling announced in today's Pre-Budget Report
that a review will be undertaken of how 'anti-avoidance legislation
can best meet the aims of simplicity and revenue protection'.
Recent Finance Acts have included a number of targeted
anti-avoidance rules (TAARs) and more generic approaches to closing
loopholes, rather than playing a cat-and-mouse game to close each
new tax scheme as it is discovered. However, the idea of
expanding this to a GAAR was considered and rejected - not only by
business but also by HMRC - in 1999.
Francesca Lagerberg, Head of National Tax Office at Grant
Thornton, said: "A GAAR sounds attractive to politicians, but
business and HMRC have concerns about whether it is really workable
- or whether it will just increase uncertainty and make Britain a
less attractive place to do business".