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General Anti Abuse Rule for the UK tax system – “certainty is lacking at this stage”, says ACCA


19 Sep 2012


Euro & Finance

The scope and proposed timetable of the government’s General Anti Abuse Rule (GAAR) has been questioned by ACCA today (the Association of Chartered Certified accountants).


Feeding into the government’s recently-closed consultation on GAAR, ACCA says that it agrees fully with the aims of the GAAR project - to reduce the scope for abusive and fundamentally unproductive efforts to extract unintended advantages from the tax system.


But ACCA has concerns about the timetable for consultation and the structure of the Advisory Panel to take the project forward.


Chas Roy-Chowdhury, head of tax at ACCA explains: “Dealing with complexity should lie at the heart of reforming the UK’s tax system. In India, facing the same issues, the Prime Ministerial panel there has advised that the implementation of a GAAR rule should be deferred for three years, and we agree that neither should the UK rush headfirst into change. We want to see a more measured approach to drafting the legislation and establishing the true impact of its provisions on both taxpayers and the tax authority.


“We are concerned about the role of the proposed Advisory Panel, especially given that that the makeup of the Panel is not yet known. We have advised that this important panel is composed of experienced and impartial experts, which can give an opinion based on knowledge of the legislation and its commercial impact.”


Speaking about tax certainty, Mr Roy-Chowdhury adds: “We support the principle of certainty in the tax system. By removing the incentive to investigate wholly artificial schemes, a targeted anti-abuse rule would encourage redistribution of efforts into productive activities, rather than the sterile process of seeking a pure tax advantage based on controversial or unexpected features of the increasingly complex tax system.”


However, ACCA is concerned that the draft GAAR legislation as it stands runs the risk of increasing the administrative burden on taxpayers, as well as their advisers because they would be forced to consider an extra layer of legislation when looking at alternative tax treatments.


Chas Roy-Chowdhury explains: “The complexity of the UK tax system already imposes a disproportionate burden on the small and medium sized enterprises (SMEs) which make up the majority of UK businesses. ACCA is strongly opposed to the imposition of any further uncertainty or complexity on them and their advisers. In the absence of specific terms limiting the application of the legislation to businesses exceeding the limits for the generally accepted SME definition, there must be clarity around the application of the rule removing the threat of the GAAR from the vast majority of everyday transactions undertaken by a typical business.”



For more information, please contact:

Chas Roy-Chowdhury, Head of Tax, ACCA

+ 44 (0)7710 707 516


Helen Thompson, ACCA Newsroom

+44 (0)20 7059 5759

+44 (0)7725 498654


Notes to Editors

1.      ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

2.      We support our 154,000 members and 432,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 80 offices and centres and more than 8,400 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.

3.      Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.



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