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.
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Lets be quite candid – you did not write the GAAR.
I said I was on the panel that effectively wrote the guidance and did influence the GAAR
And let’s be candid Justin, where did Richard make any such claim? Your comment is either ridiculous or trolling, plain and simple.
If I had written the GAAR it would have been better
In his original post, Richard said “I was a member of the committee that wrote the GAAR”.
Yes
I think that in practical terms that’s a fair statement
The GAAR was always dependent on the guidance notes
There is almost no relationship between the first and second drafts
“I was a member of the committee that wrote the GAAR” might inadvertently give people the impression that you were on the Aaronson Study Group, Richard. As I understood it (not least from your post on 25 Jan 2013) the role of the interim panel, to which you are referring, was to advise on and amend the guidance, not the GAAR itself, which had by then already been published in the draft Finance Bill 2013.
I think it fair to say that there was lot of influence on the final outcome Mike
I’m sorry but the real issue here is that this Chancellor doesn’t listen to any reasonable people at all.
All he has ever done is pander to his party’s neo-liberal idiotology (idealology) and reduced his office to nothing more than a economic wrecking ball.
In paragraph 5.48 of his GAAR report – the list of participants in the study group is on page 2 – Graham Aaronson took the view that a special GAAR penalty regime “would be seen as presenting an irresistible temptation to HMRC to wield the GAAR as a weapon rather than to use it, as intended, as a shield.”
See http://webarchive.nationalarchives.gov.uk/20130321041222/http://www.hm-treasury.gov.uk/d/gaar_final_report_111111.pdf
That is, rather than the GAAR being deployed only in cases where other tools do not work, HMRC could start to use the GAAR as the first line of attack so they can charge increased penalties, over and above the penalties of up to 200% that already apply. This point seems to have been implicitly accepted at the time – judging from Richard’s comments, the idea of a special penalty regime for the GAAR was actively considered in 2013 and dismissed. So, before the GAAR has even been tested in action, what has changed?
Graham was wrong, as he and I debated at length at the time