GAAR panel member steps down after Panorama sting

A TAX ADVISER sitting on HM Revenue & Customs’ GAAR panel has left the post after he was recorded by the BBC’s Panorama programme outlining the advantages of tax planning and methods in which monies can be kept from the chancellor’s “grubby mitts”.

David Heaton (pictured), a partner with Baker Tilly, was speaking at the 101 ideas for personal tax planning conference in London, two months before joining the GAAR panel, which advises HM Revenue and Customs on tackling artificial and aggressive tax avoidance.

George Osborne was reportedly notified about Heaton’s comments – which are due to be broadcast on Monday evening – before flying to a meeting of European finance ministers in Lithuania.

The chancellor is said to be “very annoyed” by the comments, and “instructed tough action to be taken”.

He was filmed describing a maternity scheme known as the Bump Plan, noting: “90% of what you pay out ends up with the employee. You can’t really knock that one.”

He explained at the conference, which took place in June, that by deliberately timing bonuses to enable an increased rebate on maternity pay, the tax paid on the bonus would effectively fall from 41.8% to just 8.4%, the BBC said.

Exchequer secretary to the Treasury David Gauke said: “The General Anti-Abuse Rule (GAAR) is designed to protect taxpayers. The role of the GAAR advisory panel is to make sure the GAAR is used where appropriate – that is to challenge the most artificial, contrived and aggressive behaviour.

“Mr Heaton’s statements are directly at odds with the government’s approach to tackling tax avoidance. A member of the panel should not behave in a way that could undermine the GAAR and its effectiveness. Therefore, it is right that Mr Heaton resigned from his position.”

An HMRC spokesman confirmed Heaton’s departure and said: “The work of the General Anti-Abuse Rule advisory panel plays an important role in HMRC’s highly effective drive against tax abuse. The panel must command the confidence of both tax practitioners and the general public.

“We will be announcing Mr Heaton’s successor shortly.”

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