New anti tax
avoidance measures mustn't allow the taxman to pick and
choose
Anti tax avoidance
measures must be balanced and not introduce unnecessary uncertainty
according to the Law Society.
The Society has also
called for any general anti avoidance rule (GAAR) to be accompanied
by safeguards as recommended in a treasury-commissioned report
published today.
The Society believes any
GAAR should guard against unacceptable levels of HMRC discretion.
Failure to include the proposed safeguards would render it
unbalanced.
Ashley Greenbank, the
chair of the Law Society's tax law committee
said:
“One of the Law
Society's concerns that arise in relation to the introduction of
any GAAR is that it should not provide an unacceptable level of
discretion to the revenue authorities in the interpretation of tax
law. Taxpayers will not be well-served by the taxman being
able to pick and choose, with GAAR applied selectively or
unpredictably.
“The report
contains some innovative proposals to address this issue which are
worthy of further consideration; including putting the burden of
proof on HMRC and setting up an advisory panel to review
transactions.”
If a GAAR is introduced,
in the Law Society's view, it will also be important that it is
accompanied by a programme to review and repeal many of the
specific anti-avoidance rules that have been introduced in much
recent legislation.
Ashley Greenbank praised
the report as 'a thorough and considered assessment of the issues'
likely to arise if a general anti-avoidance rule (GAAR) is
introduced into UK law. The Committee met with members of the Study
Group as part of the Group's process for preparing the
Report.
Ends
Notes to
editors:
Contact: Rebecca
Kiernan, The Law Society, 020 7316 5592