HMRC has rewritten its guidance to the disclosure of tax avoidance schemes (DOTAS) regime.
Although the number of schemes reported has reduced over the years, the government (ironically) is concerned that some avoidance schemes seem to be slipping the net (avoidance is of course perfectly legal).
Taxjournal reports that Graham Aaronson’s report on the merits of a general anti-avoidance rule (GAAR) concluded that "purposive interpretation [of tax legislation], specific anti-avoidance rules and DOTAS are not capable of dealing with some of the most egregious tax avoidance schemes".
Why does HMRC want to know tax arrangements, who has used such arrangements and how they work?
HMRC answer the question thus:
"On its own the disclosure of a tax arrangement has no effect on the tax position of any person who uses it.
However, a disclosed tax arrangement may be rendered ineffective by Parliament, possibly with retrospective effect."
Retrospective legislation is a step on the road to dictatorship, and the government would be advised to steer clear from that particular course of action.
Moreover it is more than a little surprising that HMRC and the government are still pushing the anti avoidance message, given that both HMRC and the government support tax avoidance eg:
- Ed Lester
- Deepak Singh
- Vodafone/Goldman Sachs
- Vodafone (again!)
Hypocrisy from the government and HMRC?
Surely not?
Tax does have to be taxing.
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As you know well Ken, the type of avoidance being targeted is not of normal tax planning but schemes aggressively exploiting loopholes in legislation to benefit the very wealthy. I don't have a problem with the likes of David Cameron using discretionary trusts to buy their country piles or billionaires using their Non Dom status to fund political parties. But I do have a problem with people trying to avoid what is due by using devices that have dubious legality and the presumption that they will probably get away with it because HMRC don't have the resources or look into every single tax return.
ReplyDeleteYep Ken, trying to get rich tax dodgers to pay their fair share - truly the first step on the road to dictatorship.
ReplyDeleteGet a grip.
More like the first step on the road to a bunch of shyster lawyers and accountants having to delay buying that lovely little place in Umbria for a couple years. Jeez. Hellish,or what?
No, retrospective legislation is the first step to dictatorship.
DeleteVery convenient to use it on people that many do not like, but once used it may well be used elsewhere for other areas of life or on other people (even for things that might affect you or your family).
"In Germany they came first for the Communists,
and I didn't speak up because I wasn't a Communist.
Then they came for the Jews,
and I didn't speak up because I wasn't a Jew.
Then they came for the trade unionists,
and I didn't speak up because I wasn't a trade unionist.
The they came for the Catholics,
and I didn't speak up because I was a Protestant.
Then they came for me,
and by that time no one was left to speak up."
Martin Niemoeller
And ironically, given the tack you have chosen to take, Ken..........
DeleteThe War Crimes Act 1991 is an Act of the Parliament of the United Kingdom. It confers jurisdiction on courts in the United Kingdom to try people for war crimes committed in Nazi Germany or German-occupied territory during the Second World War by people who were not British citizens at the time, but have since become British citizens or residents. The legislation was enacted, as there then were no provisions to allow the extradition of British residents, or naturalised citizens to face trial for war crimes in third countries"
Shameless Wiki pasting, I know, but an example of /good/ retrospective legislation?...........
War crimes were a crime before that legislation was enacted. It is not an example of retrospective legislation.
DeleteHow about this then, Ken?
DeleteAnyway, a difficult subject - one that your characteristically equivocal approach doesn't fully do justice to ... but then blogs don't do complexity. I'll maybe comment further on this if I get the chance, because it's interesting as well as difficult.
Stew G
P.S. Re the link above - I'm not trying to score points (for once!), by the way. I recognise that it doesn't undermine your concerns re dictatorship (which I - tentatively - disagree with for other reasons). I just thought it was interesting to note that these things can go both ways.
DeleteSG.
Erm, actually Ken, the war crimes act was retrospective, in its application. Perhaps just glancing at something and pronouncing ain't the best way forward, here?
DeleteIt is not retrospective, war crimes were already a crime before it was passed.
DeleteSigh, why not actually look at what I'm saying ? Just repeating something mulishly don't make it so.........
DeleteKen, perhaps you'd like to remind posters here who the biggest orchestraters of tax avoidance are and who the biggest benefactors of those large firms are.
ReplyDeleteIt's not the little family firm of accountants or small practices that look after the less-than-average to slightly average income earners of the UK that HMRC are going after.
So stop trying to pretend you are mainstream by painting this picture of 'the little guy' getting caught up in this.
I think you will see that Vodafone and Goldman are clearly mentioned above in connection with the word "avoidance".
Delete