Tax – Customs plans mini-GAARs

Customs & Excise plans to issue a consultation paper this summer proposing mini-GAARs as its alternative to the Inland Revenue’s single anti-avoidance rule.

Martin Brown, head of VAT policy, told Accountancy Age: ‘We haven’t formed a final view, but our approach will be different to the Revenue’s.

‘We don’t want one broad general anti-avoidance rule, we want several mini-GAARs targeting specific areas.’ He said the mini-GAARs would focus on areas such as retail avoidance schemes.

A Customs consultation paper on the subject is expected to be issued this summer, at the same time as the Revenue issues its much debated consultation paper on GAARs.

Customs is opposed to a single GAAR for several reasons. First, there is a feeling that a GAAR may be beyond the powers vested in Customs by European VAT law. Second, it may not be easily interpreted by the courts. Brown also said there were worries over invoking a GAAR, and compared it to a nuclear weapon: good as a deterrent, but could be dangerous to put into operation.

John Whiting, head of tax at Price Waterhouse, said: ‘Mini-GAARs will build on what Customs has already got.

The Revenue has nothing like this at the moment.’

Related reading