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Daily Insurance Industry News
Tuesday 25th of September 2018
December 6, 2010

HM Treasury immediate effect: business tax avoidance clampdown

by Gill Montia

Story link: HM Treasury immediate effect: business tax avoidance clampdown

The Government has announced a number of changes to legislation to tackle tax avoidance, some of which take immediate effect.

The move follows this autumn’s publication of a code of conduct on taxation for banks and other financial institutions, which have already agreed to adhere to the spirit, rather than the letter, of UK tax law when advising clients.

The clampdown announced today is expected to raise over £2 billion in revenue during the course of this parliament, according to Exchequer Secretary to the Treasury, David Gauke.

Two measures with immediate effect are as follows:

The prevention of groups of companies using intra-group loans or derivatives, to reduce the group’s tax bill.

The addressing of schemes where a company does not fully recognise certain amounts in its accounts involving loans and derivatives.

In addition, three measures yet to be fully outlined will tackle tax avoidance through:

Addressing the practice of disguised remuneration.

Stopping investment companies retrospectively changing the currency they prepare their accounts in for tax purposes.

Tackling businesses that artificially split the supply of services to reduce VAT.

In addition, the Exchequer Secretary has asked Graham Aaronson QC to lead a study into a General Anti Avoidance Rule (GAAR).

The work will consider whether a GAAR could deter tax avoidance, while at the same time retaining a tax regime that is attractive to businesses.

In any event, GAAR will not be introduced without formal public consultation.

 

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