Unreliable evidence: A GAAR is on the way to reduce tax avoidance

The possible introduction of a General Anti-Avoidance Rule (GAAR) was the subject matter of part two of a recent Radio4 programme, Unreliable Evidence - hosted by Clive Anderson. I referenced the first half of the programme in a blogpost last week before going on a short holiday.

The informed guests who shared their views during the show were:

• Graham Aaronson QC
• Professor Judith Freedman
• Lord Hoffman
• Steve Edge, from Slaughter & May

The first 3 are, respectively, Chairman and members of the official UK GAAR study group set up in January by David Gauke the Exchequer Secretary to the Treasury. Thus their views were especially relevant and illuminating.

Tax Journal magazine has now reported a summary of the radio programme.

Listening to the discussion I was struck by Graham Aaronson's generally positive comments. I was left with the impression that he anticipates formulating a workable GAAR and that this will be included in the report we are promised will be published by the GAAR study group this October. This is contrary to the view I have expressed previously on the Tax-Buzz blog.

This approach is clearly a sensible way to be proceeding. Any resulting rule will have been formulated by tax lawyers rather than by HMRC and the parliamentary draughtsman. As such it is likely to be more effective, focused and workable than might otherwise be the case.

ps: Hat-tip to Keith Gordon who pointed out to me that G AARonson was an obvious choice to chair this committee!