The panel formed by the UK’s revenue department to help draw the lines between acceptable tax planning and abuse has been bolstered with the addition of Boodle Hatfield partner Sue Laing.
HMRC’s General Anti Abuse Rule came into force on 17 July and applies to income, corporation, capital gains, inheritance and stamp duty land tax, among others.
The GAAR panel now comprises six members, the other five being Michael Hardwick, a consultant at Linklaters law firm; David Heaton, partner at accountancy and business advice firm Baker Tilly; Brian Jackson, vice-president for group tax at Burberry Group; Gary Shiels, a business consultant; and Bob Wheatcroft, a tax partner at Armstrong Watson, an accountancy firm.
Members of the GAAR panel are appointed for a three-year term. The bulk of their work is in approving GAAR guidelines and giving opinions on cases referred to the panel by HMRC; its views are not binding upon HMRC however, it should be noted.
Concerns about the GAAR have centred on the perceived vagueness of parts of the guidelines and that therefore the authorities will have considerable – and possibly dangerous – discretion as to whether or not a practice is “abusive” or not.
At its core the GAAR rejects the notion that taxpayers are entitled to try to reduce their tax obligations by any legal means. It also aims to stamp out practices which produce a tax result which goes against the intended consequences of the law. What the GAAR is not intended to do is to stop sensible planning measures – although the subjectivity inherent in any such judgement promises to make deciding on GAAR cases anything but clear cut.