Bloomberg BNA Tax & Accounting Report | March.01.2013
This article, about a recent panel discussion on anti-avoidance rules, quotes London tax partner Nick Thornton, a member of the panel.
Initially, tax professionals welcomed a general anti-abuse rule (GAAR), but now taxpayers and practitioners are wary of "mission creep,” said Thornton. He also noted that 2012 had been an "unprecedented year" in which taxes--and in particular, tax avoidance--have been front-page news.
"It is a hot political topic," he said, as "revenue authorities are perceived as doing sweetheart deals" with large multinationals.
"There is a perception that revenue authorities should do more to raise tax from big business," Thornton continued, noting that more than 40,000 taxpayers have appeals before H.M. Revenue and Customs, but almost none of those appeals relate to big business. "This leads to political pressure. The perception is that this multinational coffeehouses chain pays no tax, but the small businessman gets clobbered by HMRC any time he steps out of line."
"Everybody believes GAAR is intended to hit highly abusive" transactions, Thornton said. "That is the hope. Whether that will be the result we will see, because the drafting will be much broader than that."