The Government has published responses to its consultation on the proposed measure to tackle the use of high risk tax avoidance schemes by “listing” certain schemes in regulations and attaching certain consequences to the use of those schemes, primarily an additional charge on tax underpaid as a consequence of using one of these schemes. The consultation ran for 13 weeks until 31 August 2011. HMRC have reported that there were a number of concerns expressed by practitioners about the proposed measures, in particular, concerning the listing criteria and the additional charge. Consultation responses also indicated that it would be difficult to implement the proposed measure, at least in its current form, in a way that was both effective and proportionate. As a result, HMRC will not be including the proposed measure in Finance Bill 2012.
The Government undertook to publish an update on the area of “high risk avoidance” in the Budget 2012. However, no announcements were made. It may be that, with the Government’s support for the new general anti-avoidance rule and the proposals to extend the Disclosure of Tax Avoidance Schemes “hallmarks” (see news items below), the Government is now less keen on this approach.