David Gauke,
Exchequer Secretary to the Treasury, has today announced a number
of changes to legislation to tackle tax avoidance. Some of these
changes will take immediate effect.
Together, these announcements will protect forecast revenues
estimated at up to £5billion over the next 4 years, and are
expected to raise over £2billion in additional revenue during the
course of this parliament.
These measures take the necessary steps to protect the
Exchequer, and maintain fairness for the taxpayer, whilst
providing certainty for businesses whose investment will encourage
the re-balancing of the economy and job creation.
Two measures with immediate effect will tackle tax avoidance by:
* preventing groups of companies using intra-group loans or
derivatives, to reduce the group's tax bill, and,
*
addressing schemes where a company does not fully recognise
certain amounts in its accounts involving loans and
derivatives
Three measures with further detail to be set out
shortly, will tackle tax avoidance through:
* addressing the
practice of disguised remuneration,
* stopping investment
companies retrospectively changing the currency they prepare their
accounts in for tax purposes, and,
* tackling businesses who
artificially split the supply of services to reduce VAT.
In addition to these measures, the Exchequer Secretary has
asked Graham Aaronson QC to lead a study into a General Anti
Avoidance Rule (GAAR). This study will consider whether a GAAR
could deter and counter tax avoidance, whilst providing certainty,
retaining a tax regime that is attractive to businesses, and
minimising costs for businesses and HMRC. The Government is
committed to predictability and stability for the UK tax system,
and would not introduce a GAAR without further formal public consultation
As set out in the June Budget, the Government is committed to
tackling tax avoidance, and has been clear that it will build in
sustainable defences to address long-standing avoidance risks.
The Government's response to significant avoidance risks
will be balanced with its commitment to improving predictability
and stability in the tax system. The Government will publish on 9
December a draft Protocol that will set out the circumstances in
which it will consider changing legislation with immediate effect.
PN 68/10
Notes for Editors
1. http://www.hm-treasury.gov.uk/d/wms_antiavoidance_061210.pdf
2. Further details on the individual measures can be found on
HMRC's website
[http://www.hmrc.gov.uk/budget-updates/index.htm]
3. The measures announced today are expected to raise £2billion
over the course of the Parliament in additional revenue. They will
also prtect forecast revenues estimated at up to £5billion over
the next 4 years. These are current estimates of the impact of
these measures. Full details on the costing of these measures will
be certified by the OBR at at Budget 2011.
4. HMRC has today published a document in response to the
consultation on bringing inheritance tax on transfers of property
into trust within the tax avoidance disclosure regime (DOTAS)
[link]. The necessary regulations, taking into account those
changes will come into effect on 6th April.
5. The study into a GAAR led by Graham Aaronson QC, will complete
its work by 31st October 2011, and inform Ministers of its
conclusions. The terms of reference will be published on
HMRC's website shortly [http://www.hmrc.gov.uk/budget-updates/index.htm]
6. The Spending Review invested £900million over the next 4 years
to transform HMRC's work against avoidance, evasion and
criminal attack to bring in extra tax revenue of £7billion a year
by 2014/15.
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