The House of Lords has continued to hear evidence on the General Anti-Abuse Rule, the latest hearing being this week. The transcript has not yet been published, but Accountancy Age has reported:
A more widely targeted general anti-avoidance principle would create “uncertainty”, provide HM Revenue & Customs too much discretion and divert its resources away from other activities, Lords have been told.
Appearing before the Economic Affairs and Finance Bill Sub-Committee, treasury director for international business tax Mike Williams said a wider rule - such as the one put forward by Labour MP Michael Meacher that would address national insurance and VAT – would take in too many ordinary tax planning measures.
This, very respectfully, is absurd. What we have is H M Revenue & Customs saying it does not want to tackle tax avoidance, and most especially that of the sort that the Prime Minister is saying is wholly unacceptable.
What’s wrong with our tax authority taking on tax avoiders?
Why don’t they want to close the tax gap – as the Public Accounts Committee also suspected they did not wish to do?
And it’s just nonsense to say a wider GAAR will produce uncertainty. Where is the uncertainty in saying that is someone tries to abuse the law they will be prevented from doing so? That provides certainty – because it stops the abuse.
I am afraid Mike Williams shows exactly why HMRC needs top down reform. What he’s actually saying is HMRC wants to continue to allow cosy tax planning deals for major multinationals whilst hiding behind the excuse that they’re permitted by regulation which is beyond our control – which is utterly untrue.
It’s time for HMRC to smell the coffee, I think