2012 Chancellors Autumn Statement – Principal Changes – Anti-Avoidance and tax evasion

The Government accepted the recommendations of the Aaronson report that a General Anti-Abuse Rule targeted at artificial and abusive tax avoidance schemes would improve the UK’s ability to tackle tax avoidance. The Government has committed to bringing forward legislation in Finance Bill 2013 to enact this measure.
Earlier this week, the Chancellor of the Exchequer and the Chief Secretary to the Treasury announced that the Government is investing a further £77 million in HMRC to increase revenues raised from tackling tax avoidance and evasion.
This investment will be used to:

  • Accelerate resolution of avoidance schemes.
  • Expand HMRC’s Affluent Unit to deal more effectively with taxpayers with a net worth of more than £1 million.
  • Increase specialist resources to tackle offshore evasion and avoidance of inheritance tax.
  • Improve HMRC’s risking technology, including increased use of third party data.

Additionally, five further measures have been announced in a Written Ministerial Statement. They are effective from 5 December 2012 and cover:

  1. Foreign bank levies – there are no longer allowable deductions for Income Tax or Corporation Tax purposes.
  2. Tax mismatch scheme – which reduces Corporation Tax liability by artificial tax treatment of loans or derivatives.
  3. Property return swaps – which convert capital losses into income losses.
  4. Manufactured payments – schemes involving stock lending arrangements.
  5. Payments of patent royalties – relief for non-trade payments to be abolished.

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