Business Fears Power of GAAR [General Anti Abuse Rule]

Business Fears Power of GAAR [General Anti Abuse Rule]

The proposed GAAR comes into effect in April 2013.

According the Financial Times [16/9/2012], new rules curbing “abusive and artificial tax avoidance risks damaging investment and giving too much power to (HMRC), business leaders have told the Treasury. The CBI said it supported plans to outlaw abusive schemes but the new rules had been drafted in a way that could hit “straightforward tax management” and undermine the government’s drive to give Britain the most competitive corporate tax system in the G20.

John Overs, head of corporate tax at Berwin Leighton Paisner, a City law firm, said the concept was “constitutionally unsound”. He said: “How much tax is due should ultimately be decided by parliament, whose intention is interpreted by the courts, not by HMRC and a group of unelected and unaccountable professionals who may have a professional interest in the matters they are asked to consider.”

Whatever your views , what we do know is that tax mitigation strategies work today. Whether they do in a year’s time, we do not know. You should take action now to avoid any uncertainty regarding the introduction of the GAAR.

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