GUARD YOURSELF AGAINST THE GAAR, URGES DSH

DSH Accountants Kent

DSH Chartered Accountants & Business Advisors is warning businesses and individuals to check their tax arrangements as HM Revenue and Customs (HMRC) will soon have new anti-avoidance legislation on their side in their crack down on tax schemes.

Glen-Thomas-Day-Smith-HunterThe new legislation, in the shape of the Government’s General Anti-Abuse Rule (GAAR), comes into force as soon as the Finance Bill 2013 gains Royal Assent. It comes in direct response to a number of court rulings that have supported the taxpayers’ right to use tax schemes to reduce their tax liability.

An HMRC spokesman said: “It is essential to appreciate that, so far as the operation of the GAAR is concerned, Parliament has come down on our side and decisively rejected the courts’ approach. The new rules will impose an overriding statutory limit on the extent to which taxpayers can go on trying to reduce their tax bill.

“That limit is reached when the arrangements put in place by the taxpayer to achieve that purpose go beyond anything which could reasonably be regarded as a reasonable course of action.”

Glen Thomas, Tax Partner from DSH’s Maidstone office, said: “The GAAR could affect many taxpayers who have previously used tax schemes to reduce their tax bill. For the next year or two, there will be uncertainty over the way in which this new legislation will be used by HMRC.

“Whilst it is likely that only the most extreme tax planning arrangements will be targeted, there may be some innocent casualties along the way as there is a possibility that the legislation could be applied where it was not intended when first proposed.

“We would urge any individual or business to contact us to ensure that their tax arrangements are in order.”

To find out more about DSH Chartered Accountants & Business Advisors, visit www.dsh.co.uk or call 01622 690666.

 

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