Link: Budget 2004
In today’s Budget speech Gordon Brown ruled out the introduction of a general anti-avoidance rule. But he pledged to ‘close loopholes in partnerships, finance leasing and VAT and make it a requirement – as in the USA – that accountancy firms and those promoting schemes register them with the Inland Revenue’.
ICAEW president David Illingworth said: ‘We fully understand and support the government’s aim in seeking to curb highly artificial tax avoidance schemes. But any rules introduced must be fair, properly targeted, proportionate and provide certainty for taxpayers.’
Aidan O’Carroll, national head of tax at Ernst & Young, warned: ‘The new disclosure requirements around tax avoidance have the potential to weigh quite heavily on business and will require careful consideration.’
PricewaterhouseCoopers’ head of UK tax, Richard Collier-Keywood, said he had no problem with the concept of full disclosure of tax planning to the tax authorities.
But he added: ‘We do see problems with the definition of what exactly has to be cleared – the definition of a shelter – and the general administrative burden this creates for taxpayers, advisers and the authorities alike.’
Calling for ‘full and open discussion’ about the development of these rules, he said: ‘The chancellor remarked that the new disclosure provisions will be similar to those in existence in the US. The main perceived commercial impact of the US tax shelter rules is an increased compliance burden. It has also effectively closed down the promotion and implementation of the 29 “abusive tax shelters” on the IRS list and some companies have less appetite for the more aggressive planning schemes than they did.’
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