QBS online | Accountancy services | Fixed price fee | Business services | In Person | Quality Services

QBS News and Blog

New General Anti Abuse Rule

Posted Aug 19, 04:37 PM

By malcolm

We now have a General Anti Abuse Rule to consider when advising clients or preparing tax returns.

It should be noted that this is anti abuse and not anti avoidance legislation. It is targeted at arrangements which abuse the legislation and there are various steps to test whether an action is abusive. The simple fact that tax is avoided is not enough to catch arrangements. There are of course many reliefs and exemptions which encourage taxpayers to make certain types of arrangements and as a result avoid tax by benefiting from those reliefs. This kind of “normal” tax planning is unaffected.

However a client may have bought into a “scheme” promoted by another company and will then need to self assess whether that scheme is abusive under the legislation. If it is the taxpayer should self assess the counteraction adjustment or risk a penalty for not doing so.

The difficulty is therefore in determining what is and isn’t an abusive arrangement. HMRC have given some guidance but there will be a transitional period while the body of case law and HMRC practice is built up. A quick review of history shows us that what is normal practice today could be seen as abusive in a few years time.

The Chartered Institute of Taxation are recommending that tax advisers should have procedures in place to review any client arrangements in this context and where necessary a second opinion should be sought from a suitably qualified expert.

What people are saying

“As a relatively new start up business we are still very sensitive to costs. Recently we received a quotation from QBS Online on a “like for like” services basis with our existing accountants. We have made the decision to move to QBS which will realize a 36% reduction in our accountancy costs. This is most welcome news at a time where every penny counts.”

- Nigel Messenger, MD, Castleman UK Ltd

Using QBS has changed the way we do business. Previously we were using many suppliers to help us with things like accounts, payroll, even IT support. Now we use QBS for all manner of business procedures, which has simplified our outgoings and allowed us more time to spend on growing our business.

- DH, Haus Digital Ltd

 

 

Newsletter!

For free updates and regular newsletters, subscribe to our mailing list by entering your email address below: