HMRC under fire over anti-avoidance

Tax advisers have criticised HM Revenue & Customs for increasing
uncertainty in the tax system.

The criticism comes on the back of HMRC’s decision to reconsider introducing
a general anti-avoidance rule and deliberation as to whether it should offer
pre-transaction clearances.

Writing in the Financial Times today, John Cullinane, president of
the Chartered Institute of Taxation, said: ‘The logical home for a GAAR is in a
principles-based tax system, as a means of attacking artificial planning without
resorting to detailed anti-avoidance rules; and with a clearance mechanism to
protect competitiveness and taxpayers’ rights.

Still, the CIOT argues the best possible course of action would be to
simplify the tax system ‘then there would be less need for clearances to be
sought, less difficult decisions about whether to grant them, and resources
freed from policing complex rules devoid of underlying principle’.

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