HMRC publish new General Anti-Abuse Rule factsheet in relation to tax avoidance schemes

On 8th December, HMRC published a new fact sheet (Compliance checks: information about the general anti-abuse rule - CC/FS34a) describing what GAAR is, relevant penalties and how a tax arrangement is classed as abusive.

The General Anti Abuse Rule, also know as GAAR, was introduced by HMRC on 17 July 2013 to make ‘just and reasonable’ adjustments to counteract the tax advantage that a person has made through the use of an abusive tax avoidance scheme. On 13th March 2014 it was extended to cover national insurance contributions.

The GAAR states tax arrangements are abusive if the entering into or carrying out of the arrangements, can’t reasonably be agreed as a reasonable course of action in relation to the relevant tax provisions, taking into account all the circumstances listed on the factsheet.  

To read the GAAR fact sheet click here.