Revenue pursues 'avoidance-proof' legislation
One of the most feared taxmen in the Inland Revenue has signalled a policy change in an effort to calm industry panic over the new tax avoidance disclosure regulations released this week.
One of the most feared taxmen in the Inland Revenue has signalled a policy change in an effort to calm industry panic over the new tax avoidance disclosure regulations released this week.
Link: Avoidance bandwagon rolls on
In an exclusive interview, Paul Clark, head of the Revenue’s Special Investigations section, broke cover to tell Accountancy Age that his department was increasingly focused on producing ‘avoidance-proof’ legislation, rather than pursuing abusers of ‘old avoidance schemes’ after the event.
‘Very experienced inspectors are using their skills to feed into new legislation to try and make it avoidance proof from the outset,’ he said.
Clark’s comments will be seen as a major effort to placate the tax profession and business, which have vehemently protested the new rules to clamp down on aggressive tax planning. The new disclosure rules were announced by Gordon Brown in March.
Clark said the Revenue was willing to listen to concerns. ‘If we are setting out to do something that does not work, then business has an opportunity to tell us,’ he said.
John Whiting, tax partner at PricewaterhouseCoopers, warned that the Revenue faced a ‘deluge’ of registrations, because it was unclear which schemes need registering. ‘There is a load of chat about employment and financial-related products, but it needs a heck of a lot of work,’ he said.
Worryingly for tax experts, the feared deluge will be handled by a department yet to be established – the Avoidance Intelligence Unit. Clark hopes that the AIU will be in place ‘within a month’, but would not comment on its structure or staffing levels.
Chas Roy-Chowdhury, head of tax at ACCA, said the draft regulations were ‘barely thought through’ and would only get ‘wider, broader and more draconian’.
Consultation over the new regulations will run until 30 June, with the final versions due on 1 August.