Posted by James Pearson on 29 Nov 2011

Independent Study on General Anti-Avoidance Rule (GAAR) Published

The QC responsible for the independent study on general anti-avoidance has laid out his recommendation to the Government to introduce a narrowly focused general anti-avoidance rule (GAAR) to the UK tax system.

After an eleven month review and with the advice of a committee of tax experts, Graham Aaronson QC has concluded that the introduction of a GAAR would:

  • Offer opportunities to simplify the tax system.
  • Deter abusive tax avoidance schemes.
  • Renew some lost trust between taxpayers and HMRC.
  • Clarify some of the legal uncertainties surrounding tax avoidance schemes.

Main Taxes and to National Insurance Contributions

The report goes on to say that it recommends that a GAAR should initially only be applied to the main taxes and to national insurance contributions – income tax, corporation tax, capital gains tax and petroleum revenue tax.

Graham Aaronson QC said of the report:

“Responsible tax planning is an essential feature in a complex tax regime, such as the UK’s.  But artificial and abusive tax avoidance schemes are widely regarded as an intolerable assault on the integrity of the tax regime.  A general anti-abuse rule narrowly targeted to deter such schemes, while not affecting responsible tax planning, should lead to a fairer, more principled and ultimately simpler tax system; and I strongly recommend that such a rule should be introduced into our tax laws.”

The Government has said that it will consider the report and its recommendations and liaise with business and tax practitioners on how a GAAR might fit with existing legislation. They will present their findings at the 2012 Budget.

Contact Us

If you would like to discuss anything mentioned in this article or to talk about how Tax Innovations can help you with GAAR, please contact us.


See also…


Cross-Border Arrangements

Tax Avoidance Schemes: Too Good To Be True?

The General Anti-Abuse Rules

Tax Avoidance Schemes: Accelerated Payment of Disputed Tax

Offshore Tax Evasion: An HMRC Briefing

The Media and Tax Avoidance

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