The UK government's spending review, in which heavy cuts
to programmes received wide attention, has also given HM Revenue
& Customs £900 million with which to address the tax gap
and tackle tax evasion and avoidance. But will such efforts will
bear sufficient fruit? James Johnston, Partner within the Private
Wealth team of Bircham Dyson Bell has a view.
The reference to tax "avoidance" (in contrast to
evasion) as part of the announced commitment to spend £900m
on a "crackdown" reflects a current concern by HMRC to be
able to challenge more easily any arrangements which they regard as
artificial, on the grounds that the arrangements were made purely
in order to reduce a tax liability. In the past, if such
arrangements were challenged on this basis it was done through the
Courts. Now, however, the Government is exploring the introduction
of a general anti-avoidance rule (GAAR). When this was first
suggested the conclusion was that it would be too difficult to
implement
