HMRC Recruits for GAAR Panel

HMRC is now recruiting members for a permanent General Anti-Abuse Rule advisory panel.

There are eight voluntary positions, which are intended to initially be for 3 years.

The panel will meet 6 times a year, and it is expected appointments will be made shortly after the interview process is completed in the week beginning 17 June.

Here is the full text of the advert:

"Applications are invited from suitably qualified and experienced individuals to be a member of the General Anti-Abuse Rule (GAAR) Advisory Panel.

The functions of the Advisory Panel are to:

• Approve HMRC’s guidance on the GAAR
• By way of specifically arranged sub-Panels, give opinions to HMRC and taxpayers about the application of the GAAR to individual cases referred to the Panel

The work of the Advisory Panel, including this recruitment process, is led by the Chair, Patrick Mears, who was appointed with effect from 15th April 2013.

This is a voluntary position (necessarily incurred expenses will be paid) that offers a unique opportunity to play a central role in the implementation of a major new development in UK tax legislation. Initial appointments will be for 3 years, but some flexibility is possible and can be discussed with individuals.

Each Panel Member will be expected to have knowledge and expertise in relation to one or more of the taxes covered by the GAAR, and be committed to making the GAAR legislation as enacted work efficiently and effectively. The aim is for the Panel to be a broad based, balanced and cohesive; the number of Panel Members is flexible in order to meet these objectives, but the expectation is for a maximum number of 8 initial appointments.

The time commitment for the approval of guidance function will be around 6 Panel meetings a year and preparatory reading. Further workload will depend on the number of cases referred. When a sub-Panel is arranged for a referred case, discussion will take place in advance over any additional time commitment.

For an application pack please click on the Apply button.  Applications, to be made by 5pm on 10 June 2013.

It is anticipated that interviews will be held during the week of 17th June 2013 (please indicate in your application any time in this week when you would be unavailable for interview). Appointments will be made as soon as possible after the interviews, subject to necessary formalities.

Job Reference: GAAR"

Tax does have to be taxing.

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GAAR Blimey!

The incoming General Anti-Abuse Rule (GAAR), as per the 2013 Finance Bill, is not as clearly defined as some tax professionals would like; they are worried that it is likely to cause "considerable uncertainty".

In theory it will come in to effect in July. However, some are calling for it to be delayed until ambiguities within in it are addressed.

Jane Lee, partner at solicitors Pannone is quoted by Accountancy Age:

"There is scope within the GAAR legislation for it to be used far more widely than the original government report had previously suggested.

The drafting of the legislation and the fact that the guidance produced by HMRC is not legally binding means that there is scope for considerable uncertainty as to the type of arrangements which may be targeted by HMRC."

Additionally, it would seem that our political masters have allowed the opinion to form that GAAR will be the silver bullet that resolves the tax issues relating to avoidance wrt multinationals such as Starbucks.

This of course will not be the case.


Chair of the House of Lords committee on the Finance Bill Lord MacGregor said:

"There is a misconception that GAAR will mean the likes of Starbucks and Amazon will be slapped with massive tax bills.

This is wrong and the government needs to explain that to the public. GAAR is narrowly defined and will only impact on the most abusive of tax avoidance.

We accept the narrowly focused GAAR as a starting point. We recommend that the scope of the GAAR should be reviewed after five years as part of a wider post-implementation review, which would look, in particular, at how the double reasonableness test had been applied in practice and its deterrent effect."

As the saying goes, the issue around GAAR will "run and run".

Tax does have to be taxing.

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Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



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HMRC and Tax Avoidance

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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Stifling Business

It seems that, despite claiming that it wants to simplify the tax system, the government is determined to add ever more layers of complexity.

That at least is the conclusion to be drawn from the government's proposals to clamp down on tax avoidance (a perfectly legal activity) by introducing a general anti avoidance rule (GAAR). GAAR was considered by the previous Labour administration. However, it was decided that it would be too expensive and complex to administer.

Critics note that the effects of GAAR will be most keenly felt by small and medium sized business.

Accountancy Age quote Andrew Jupp, head of tax at Haysmacintyre:

"It is unnecessary and unwelcome, and will introduce yet more uncertainty into the tax system. Unless it is coupled with a vast range of pre-transaction approvals it will stifle businesses ability to operate and make sensible commercial decisions.

Whilst the largest British companies might be able to cope with a GAAR, I cannot see how the smaller businesses, which are the lifeblood of the UK economy, will manage. These businesses constantly tell us that they want less red tape, not more."

James Bullock of McGrigors said:

"The problem is that there will inevitably be a situation - probably many situations - where commercial pressures mean that transactions have to be completed before specific HMRC clearance can be obtained confirming that they do not fall foul of a GAAR.

You will then have precisely the situation that applies at the moment - HMRC challenging the tax treatment of transactions after the event, on the basis that the GAAR applies. Taxpayers will oppose these challenges and the whole thing will end up being interpreted by the Courts - just as happens at the moment".

GAAR will simply push companies to move out of the country and reduce the tax take, thus being counterproductive to the economic well being of the country and the coffers of the government so hungry for cash.

Tax does have to be taxing.

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What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"