{"id":18485,"date":"2012-12-06T09:25:56","date_gmt":"2012-12-06T09:25:56","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=18485"},"modified":"2012-12-06T09:25:56","modified_gmt":"2012-12-06T09:25:56","slug":"the-government-knowingly-created-a-massive-new-tax-avoidance-abuse-yesterday","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2012\/12\/06\/the-government-knowingly-created-a-massive-new-tax-avoidance-abuse-yesterday\/","title":{"rendered":"The government knowingly created a massive new tax avoidance abuse yesterday"},"content":{"rendered":"<p>As my TUC colleague\u00a0Nicola\u00a0Smith\u00a0<a href=\"http:\/\/touchstoneblog.org.uk\/2012\/12\/obr-demonstrate-huge-new-tax-avoidance-loophole-opened-up-by-employment-rights-for-shares-scheme\/\" target=\"_blank\">pointed out on the Touchstone blog\u00a0yesterday<\/a>:<\/p>\n<blockquote><p>[The\u00a0AutumnStatement] provides\u00a0<a href=\"http:\/\/cdn.hm-treasury.gov.uk\/as2012_policy_costings.pdf\">costings<\/a>\u00a0for the\u00a0<a href=\"http:\/\/touchstoneblog.org.uk\/2012\/12\/one-autumn-statement-two-employee-share-ownership-policies\/\">new employment rights for shares scheme<\/a>\u2014 the costs of which are estimated by the Exchequer to be \u00a380 million by 2017-18. But the OBR also note that:<\/p>\n<p><em>There are a number of uncertainties about the costing\u2026.the cost is expected to rise towards \u00a31 billion beyond the end of the forecast period\u2026.it is hard to predict how quickly the scope for tax planning will be exploited; again this could be quantitatively significant as a quarter of the cost already arises from tax planning.<\/em><\/p><\/blockquote>\n<p>Now when even the OBR is setting the alarm bells\u00a0ringing\u00a0about the potential cost of abuse on this issue we should all be worried. As Nicola continued:<\/p>\n<blockquote><p>If a quarter of the budgeted costs arise from tax planning that means this new measure has already introduced a loophole that will cost the Exchequer \u00a320 million a year by 2017\/18. But given the OBR suggest that the costs of the policy will rise to \u00a31 billion shortly after this period (presumably in 2018\/19) their analysis suggests that by this point avoidance will be costing the taxpayer \u00a3250 million a year \u2014 a quarter of a billion. This puts the \u00a310 million that Starbucks have apparently today agreed to pay into sharp relief.<\/p>\n<p>These costs are not a surprise, given the the Government have already\u00a0<a href=\"http:\/\/touchstoneblog.org.uk\/2012\/11\/michael-fallon-confirms-that-employment-rights-for-shares-will-lead-to-new-tax-avoidance-loophole\/\">set out<\/a>\u00a0how the tax avoidance opportunities could work. But considering that\u00a0<a href=\"http:\/\/www.guardian.co.uk\/politics\/2012\/dec\/04\/employers-reject-shares-for-employment-rights\">fewer than five<\/a>respondents to the Government consultation on this issue are supportive of it, and that it\u2019s set to cost 40% more than the Chancellor\u2019s much touted tax repatriation from Switzerland will raise, should it not be dropped?<\/p><\/blockquote>\n<p>Definitely.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As my TUC colleague\u00a0Nicola\u00a0Smith\u00a0pointed out on the Touchstone blog\u00a0yesterday: [The\u00a0AutumnStatement] provides\u00a0costings\u00a0for the\u00a0new employment rights for shares scheme\u2014 the costs of which are estimated by the<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2012\/12\/06\/the-government-knowingly-created-a-massive-new-tax-avoidance-abuse-yesterday\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-18485","post","type-post","status-publish","format-standard","hentry","category-tax-avoidance"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/18485","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=18485"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/18485\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=18485"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=18485"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=18485"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}