The government has announced today that:
At Budget 2015, the government also announced that it would strengthen the deterrent effect of the General Anti Abuse Rule (the GAAR) by introducing a penalty. The GAAR applies to the worst cases of tax avoidance and has a strong deterrent effect. We expect there will only be a fairly small number of cases brought under the GAAR. It is right that they attract penalties that go beyond the application of the penalty regime in all other avoidance cases to distinguish GAAR cases as the worst form of avoidance. The new penalty will be based on the amount of tax people sought to avoid in a GAAR case.
I was a member of the committee that wrote the GAAR.
I tried very hard to get penalties included in it in 2013. The references that there are to penalties in the guidance notes are largely due to me, but failed to properly address the issue.
Now Osborne has agreed I was right all along.
About time too.