ACCA Slams New UK Tax Shelter Disclosure Rules

by Jason Gorringe, Tax-News.com, London

21 May 2004

Following the publication for consultation on Monday of the UK Inland Revenue's new regulations on the disclosure by tax advisers of tax sheltering arrangements being offered to clients, the Association of Chartered Certified Accountants (ACCA) has condemned the legislation as "worse than we expected".

Under the new rules, advisers will be obliged to provide details of tax minimisation schemes to the Inland Revenue within five days of their implementation, or face a fine of up to £5,000. The tax authority will then endeavour to provide a reference number for the scheme within a 30 day period.

However, this does not, according to the Revenue, give any indication of whether the scheme will eventually be judged admissible.

Speaking earlier this week, head of tax at the ACCA, Chas Roy-Chowdhury condemned the truncated consultation period allowed by the Inland Revenue, arguing that:

"They're flouting their own guidelines. If they really knew what they were doing and had it prepared they could have issued the consultation at the time of the Budget."

He went on to add that the new rules have the potential to become a compliance "paperchase" for tax professionals, observing that:

"If they're going to stifle tax planning so as to clamp down on avoidance, why have tax breaks at all. Are they there to be used or not?"

The full text of the Inland Revenue's draft disclosure requirements can be found in the Tax News Resources section

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