Firms up in arms at £2bn tax raid

Firms up in arms at £2bn tax raid

first_img whatsapp Firms up in arms at £2bn tax raid KCS-content Monday 6 December 2010 9:28 pm Tags: NULL THE government yesterday announced a clampdown on tax avoidance which it said would raise £2bn, drawing fierce criticism from business groups.David Gauke, the Treasury minister in charge of taxation, announced a raft of measures, including two that will come into force with immediate effect. He said the changes would raise £2bn by the end of the parliament. Businesses slammed the government for failing to give them prior warning of the changes, insisting the knee-jerk action was at odds with its oft-repeated aim of providing a stable tax environment. Neal Todd, tax partner at law firm Berwin Leighton Paisner said: “What is disappointing is that the government wants to bring these changes in with immediate effect. “If you wake up in the morning and the law is not the same as when you went to bed, then it’s not good for businesses which want to plan.” In a written statement to the House of Commons, Gauke said the government was introducing legislation to crack down on firms which manipulate intra-group loans or derivatives to reduce their corporation tax bills, a procedure known as “mismatching”.The second piece of legislation, which also came into effect yesterday, will clamp down on schemes where firms do not include taxable loans or derivative contracts in their accounts. “As a result of persistent avoidance… the government is announcing that the legislation will now apply… wherever a company is a party to tax avoidance arrangements,” Gauke said. There are other measures in the pipeline, designed to crack down on:• the use of trusts to avoid paying income tax or national insurance on an employee’s pay;• the creation of foreign exchange losses or gains in the accounts of investment firms;• and the manipulation of VAT rules in so-called “supply splitting”.But it was the prospect of a new General Anti-Avoidance Rule (GAAR) that caused the most alarm. The rule, which was dismissed by the Labour government as “unworkable”, would give HMRC much more freedom to decide what constitutes tax avoidance.Will Morris, head of the CBI tax committee, said a GAAR “would introduce a very unwelcome element of uncertainty to the tax system”.Chancellor George Osborne rushed out the anti-avoidance measures as a sop to his Liberal Democrat coalition partners, who are under siege after reneging on a landmark pledge to oppose a hike in tuition fees. An aide to Clegg told City A.M.: “The tax avoidance crackdown is a Lib Dem policy through and through. It shows we are making a difference by being in government.” Share by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastMoneyPailShe Was A Star, Now She Works In ScottsdaleMoneyPailNoteabley25 Funny Notes Written By StrangersNoteableySerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesBetterBe20 Stunning Female AthletesBetterBeHistorical GeniusHe Was The Smartest Man Who Ever Lived – But He Led A Miserable LifeHistorical GeniusMagellan TimesThis Is Why The Roy Rogers Museum Has Been Closed For GoodMagellan TimesElite HeraldExperts Discover Girl Born From Two Different SpeciesElite Herald whatsapp Show Comments ▼ last_img

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