The Lib Dems have published a tax consultation document for discussion before their spring conference. One issue that jumps out is under the heading General anti-avoidance rule, where they say:
The Coalition has introduced a general anti- abuse rule, which outlaws wholly artificial and aggressive tax avoidance by individuals and companies in the UK.
However we continue to believe that the government should go further and promote a broader anti-avoidance rule. This would state some clear principles that we expect people to respect, and have a pre-clearance system that would allow individuals and businesses certainty around their tax affairs. These safeguards will prevent the risk of someone being penalised for taking a step that they reasonably believed was acceptable at the time. Such a system would also promote simplicity by allowing the removal of a large quantity of specific anti-avoidance regulation in the extremely cumbersome UK tax code.
Question:
Do you agree that the GAAR, once implemented, should be further strengthened? And do you agree with the trade-off for taxpayers of a pre-clearance system to provide certainty?
If that's what they think (and they're right to do so) why aren't they backing Michael Meacher's General Anti-Tax Avoidance Principle Bill that I wrote since it delivers three things the current propsoal does not. The first is a proper economic substance test. The second is a clearance system and the third a penalty regime for abuse of the GAAR. It's a shame they haven't backed it when they have had the chance.
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`If that’s what they think …….`
Its not, it’s about channeling and managing the disgust of the activists away from the leadership.
The “they” who believe in a broad anti-avoidance rule are the Party members on the Taxation Working Group.
The “they” who didn’t back the General Anti-Tax Avoidance Principle Bill you mention were presumably the parliamentarians.
Two completely different “they”s, Conference sets the policy of the Party. MPs are under obligation to represent their constituents. The parliamentarians are not and cannot be mandated by the party – in fact there’s a large body of party policy which MPs have no intention of pursuing. So what Conference eventually decides is only loosely connected with how MPs vote in The House.