The announcement in today’s Budget that the government will press ahead with a General Anti-Abuse Rule (GAAR) has been given a qualified welcome by the Chartered Institute of Taxation (CIOT).
The CIOT has been actively involved in the debate around a possible GAAR, especially in the wake of the publication of Graham Aaronson’s report. The CIOT’s criteria for an effective GAAR include the need to make sure that the balanced package proposed by Graham Aaronson was maintained, and that the detail of any GAAR gave clear guidelines in terms of what it would apply to.
John Whiting, Tax Policy Director at the CIOT, said:
“We think the government is right to press ahead with a narrowly-targeted GAAR aimed at truly artificial schemes. We welcome the recognition in the announcement that a key need, as we have always said, is for the rule to be practical and certain for taxpayers and HMRC.
“It is also very important to maintain the safeguards for taxpayers in the Aaronson report. This needs to be a balanced package.
“Any GAAR needs to be carefully designed to balance the needs of business and individuals for certainty against the Exchequer’s targeting of what the Chancellor described as ‘morally repugnant’ avoidance.”
Notes to Editors
- The CIOT, together with the Association of Taxation Technicians and Low Incomes Tax Reform Group, submitted a major paper to HMRC on the GAAR report earlier this year. See http://www.tax.org.uk/media_centre/LatestNews-migrated/GAAR_CIOT_ATT
21 March 2012