As many will know legislation to create a General Anti-Abuse Rule (GAAR) will be included in the Finance Act 2013. HM Revenue & Customs has now announced the membership of the interim committee that has been appointed to review, amend if necessary and approve the initial guidance notes which will accompany the legislation . I am pleased to have been asked to serve on that committee.
As many will know, I have reservations about the proposed GAAR and as a result drafted an alternative proposal that Michael Meacher presented to the House of Commons in September 2012. That proposed a much broader General Anti-Avoidance Principle, and that Bill still remains before the House of Commons at present, waiting for its second reading. However, pragmatically, I am well aware that Michael Meacher's bill will fail and that the government's currently proposed legislation, or something remarkably similar to it, will reach the statute book.
The result is that when Graham Aaranson discussed membership of this committee with me I was presented with a dilemma. Whilst I would clearly prefer legislation that goes a lot further than that which is proposed, I respect the fact that the current proposal, based as it is on Graham's hard and unpaid work, is, based on his judgement and that of ministers, the best that is achievable and the most appropriate for the UK at this time.
Graham, and the government, were keen that civil society be represented on the committee tasked with advising on implementation of the GAAR. That is why David McNair of Save the Children has been appointed to the committee, and why I was invited to join it as well. I welcomed that approach: it is, I think, appropriate that those with differing opinion be consulted in this process. It is out of constructive debate between those who do not agree that most progress is made. I have therefore accepted the appointment.
In doing so I accept that I will be advising upon and assisting the implementation of legislation that does not reflect all I would wish for. So be it; it is a fact of life that one does not always get you wish for. It's also true though, that as I said when welcoming Graham's proposals in November 2011, that this GAAR is better than no GAAR: I am quite sure of that; I reiterated that point when giving evidence in the Lords this week. In that case, whilst I have used what some undoubtedly think robust language in opposing it, for that is what happens in the course of debate, I have also now given a clear commitment that I will offer my best professional judgement to this new committee when addressing the issues on which it is asked to comment. If, as I think, the currently proposed GAAR is an important first step on the way to a much better General Anti-Avoidance Principle then it is my wish that this new GAAR work as well as is possible, whatever reservations I have about it in its current form.
Having said this I will also now cease to comment on any detailed matters relating to this issue: committees of this sort have to work confidentially. Graham Aaranson has kindly agreed that I may discuss the broad principles inherent in the GAAR and my preferred alternatives but I stress that as to detail I am bound to confidentiality and will not be discussing GAAR related issues here. That does not mean I have changed my mind on the desirability of further developments; it means I have accepted that the task I have now engaged upon is to use my best judgement to ensure the existing proposals work to best effect. It is my wish, and I am sure the wish of all who have concern about tax avoidance, that they do just that.
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Whist I note what you say about restricting further comment, temporarly I hope, what would you say is the main reason that Michael Meacher’s bill will fail and perhaps that would be something worth addressing? Afterall MPs are supposed to represent and implement the will of the people ( provocative I know)
The government has made it clear it is a step too far
I think they are wrong
David Cameron’s comments suggest he agrees
Richard,
I have followed and read your response to the Lords committee on the Finance Bill, and while I can understand your reasoning above, I really do believe that your objections to the proposed GARR are so profoundly at odds with what will in all likelihood become law that your membership will be seen as an endorsement of things you reject.This legislation is a sop to those who might be fooled into thinking that it is the solution ,whereas it is mere tilting at windmills. If you are allowed to publish a dissenting opinion then maybe justice will be satisfied.
PS I do appreciate your efforts on so many important issues and offer this opinion in that spirit
I agree with you, Mark. This is a big coup for the wily Aaronson. He has captured the strongest critic of his GAAR. That’s the plain and sad truth.
I agree with Mark, those that the powers that be seek to destroy, they first co-opt onto a government committee.
A bit like Nick Clegg’s and the Lib Dem’s grand plan to change things ‘from the inside’!
More seriously, I watched Graham Aaronson’s evidence to the House of Lords Select Committee last Monday, and was stunned when he asserted that the only people that hold the view that his GAAR could legitimise rather than deter tax avoidance; being a long time reader of this blog and a big fan of Richard’s I was about to yell at the telly: “what about Richard Murphy” when Aaronson added “even Richard Murphy does not hold that view, or at least did not hold that view when I spoke to him two days ago.” I was gobsmacked, and that’s putting it mildly and I can only imagine how Meacher (whose GAAR Richard drafted) and Black (who Richard has quoted extensively on this blog and elsewhere) feel. This is all rather depressing for me, to be perfectly honest.
I meant to say that Aaronson asserted that the only people that hold the view that his GAAR could legitimise rather than deter tax avoidance were Graham Black (former president of the Association of Revenue and Customs — the union of senior tax professionals in HMRC) who Aaronson dismissed as “some sort of shop steward” and Michael Meacher MP who Aaronson all but branded a loony lefty.
Congratulations on your appointment Richard. Must be both a great honour and a challenge to represent 99% of the population on such a panel.
Richard
I haven’t worked my way through the whole “cast” of the GAAR IAP, but don’t you feel a little like a fox amongst hounds?
Apart from your presence, the panel appears to be entirely one sided and my heart goes out to you!
What are they playing at?
As you know I’m a Chartered Tax practitioner and even I can see this is ridiculous!
There must be some real HMRC presence on the panel, not the plastic kind (those with Big Four background) in order to give it a balanced view.
If you weren’t there it would have all the purpose of “rubber stamping” committee!
I hope you are fully fit soon.
Richard – Congratulations – I think your decision is sound and we will await the initial guidance notes and the eventual end to your silence……
In the absence of detail on the HMRC website, could you please confirm that this list correctly states the current posts of the Interim Advisory Pane Members:
– Graham Aaronson QC (Chair) – Barrister at Pump Court Tax Chambers
– John Barnett – Partner and Joint Head of Corporate Tax- Burges Salmon
– John Bartlett – Head of group tax at BP
– Emma Chamberlain – Barrister at Pump Court Tax Chambers
– Rob Clayton – Group Tax Director at RSA Insurance Group
– Bill Dodwell – Head of Deloitte’s Tax Policy Group
– Steve Edge – Corporate Tax Partner at Slaughter and May
– Francesca Lagerberg – Head of Tax at Grant Thornton
– David McNair – Principal Economic Justice Adviser Christian Aid
– Richard Murphy – Tax Research UK
– Gary Richards – Corporate Tax Partner, Berwin Leighton Paisner
– Tim Voak – Group Tax Director at Tesco
Geoff
David McNair is now with Save the Children but otherwise I think that looks right
Richard
Richard, I applaud both your membership of the committee and the pragmatism with which you accepted it, in the spirit of “one small step for man………..”. Well done.
Richard
I know that, in the spirit of Harry S Truman, they’d rather have you in the tent p@@sing out than out the tent p@@sing in.
Regardless, I’m sure you will do a good job.
Remember to ensure that clearance seekers pay proper charges. They are, after all, by definition, people that are ‘pushing the envelope’ on what is acceptable tax planning.
And always remember, the worse thing for all sides (business, the tax professions & HMRC) is a “false, fleeting, perjured clearance”.
There is no clearance system in this GAAR
Sorry, I may have misread the FT article. I thought it mentioned clearances but mea culpa.
The is no denying that yours and David’s memberships are progress.
Will you still be able to criticise the operation of this GAAR and be able to speak out about the need for reform?
Yes
Richard’s going to have to be juror 8…maybe you should watch 12 angry men for inspiration before you start your work!
Difficult decision, but I don’t see why it should be the wrong one, even if it’s obvious that The Other Side will make as much capital out of it as they can. Best of luck; wish you strength; and keep writing for us on everything else.