TaxCorporate TaxAvoidance rules ‘will be vague’

Avoidance rules 'will be vague'

Definitions of tax avoidance, soon to be published by HM Revenue & Customs, will be deliberately vague, the head of the taxman’s anti-avoidance unit admits

Speaking last week at a conference staged by Accountancy Age’s
sister publication Financial Director, Chris Tailby spoke of his
intention to publish a set of ‘avoidance’ hallmarks that would provide an
indication of whether tax avoidance was taking place.

But despite the intention of providing clarification for corporate and
personal taxpayers, Tailby said HMRC would hold back. ‘It’s better to have a
grey area where there’s a bit of uncertainty because it does work for our
benefit,’ he said.

HMRC’s hallmarks are intended as points of reference for personal and
corporate taxpayers to allow them to judge whether the schemes or transactions
they are involved in can be classed as tax avoidance.

Recognition of one of the hallmarks could lead to the awarding of a ‘badge’
by HMRC. ‘If you get one of those, we’re probably going to ask more questions,’
said Tailby.

During his appearance at the FD summit Tailby listed three critical
indicators: whether a transaction appears to be motivated by tax advantages;
whether there is a mismatch between the tax and the economic outcomes; and
whether the tax treatment involves some artificiality in interpreting
legislation.

Tailby gave no indication of when the ‘hallmarks’ would be published by HMRC.

The plan is part of moves to try and isolate those involved in complicated
avoidance schemes, with a view to penalising taxpayers and advisers who do not
pay the ‘right tax at the right time’.

Related Articles

Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

2m Alia Shoaib, Reporter
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

2m Austin Clark, Reporter
How to educate your clients about tax avoidance

Corporate Tax How to educate your clients about tax avoidance

2m Clear Books | Sponsored
CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

Corporate Tax CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

3m Austin Clark, Reporter
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

3m Emma Smith, Managing Editor
Should I incorporate my buy-to-let business?

Corporate Tax Should I incorporate my buy-to-let business?

4m Emma Rawson