TAX NEWS - June 2010

MPs to debate tax avoidance

MPs will today debate the need for a general anti tax avoidance provision in an attempt to curb the avoidance industry.

A one-and-a-half hour debate has been called by Dr John Pugh, Liberal Democrat MP for Southport, in the Westminster Hall chamber.

He said he called the debate because he wanted exchequer secretary David Gauke to outline current Treasury and HMRC thinking on the need for a wider " principles based" approach to tax law. He said he wanted a general law to curb, if not end, the annual stream of measures closing down specific avoidance schemes.

Pugh said earlier a general anti avoidance provision had been introduced in Australia and worked.

He said he believed "the jury inside the Treasury is still out on this question" despite fears that it could encourage a flight of capital away from the UK, provided the legislation was precise in terms of how it would apply.

He said his party would prefer tougher action to curb avoidance and increase tax revenue rather than a crackdown on welfare to secure savings, adding: "I would very much love the coalition government to act on these lines."

He said under the existing regime, even with a requirement for the notification of avoidance schemes, the tax authorities were continually playing catch-up.

He said he would also question the minister on the resources available in the Treasury and HMRC to act on avoidance matters.