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Accountants and professional groups are celebrating a rare tax victory over the government as concessions have been granted on tax avoidance after calls that the Revenue proposals were too draconian. The climb down on disclosure requirements sees an extended deadline for reporting financial instruments as well as let-ups in the ways the rules work in practice. Under measures introduced by Chancellor Brown, tax schemes and in-house tax departments as well as independently run programmes must be disclosed to the Revenue for registration from August 1. The Paymaster General, Dawn Primarolo, who declared the revisions - said the final draft of legislation would now be published with an updated deadline for industry compliance by October 31. She said: “These changes will ensure that disclosure will only be required of those schemes and arrangements which pose the greatest threat to the Exchequer and strike the right balance as to the range of people who will be required to report. “They will also provide promoters sufficient time to make the transition to the new regime without compromising its objectives.” In an equally welcomed move, the Revenue has declared it will now offer clearer definitions on avoidance – even offering accountants a list of approved operations outside the clampdown. Any financial instrument marketed between 18 March and 23 April this year is to be declared under the amend - but ISAs and financial leasing are approved and outside the revisions. Contractor UK covered industry concerns that the IR would become ‘swamped’ with potentially useless information in logging schemes for bespoke tax arrangements for clients in one comprehensive e-database. “The changes mirror many of our representations to the Revenue and we welcome them,” said Aidan O’Carroll, Director of Taxation at Ernst & Young. “By changing the approach to financial products, we hope the Revenue will reduce the risk that they will be swamped with disclosures that really will not interest them.” Promoters of avoidance schemes are to be given until the end of October to disclose financial product arrangements including employment products, where the relevant date falls on or between 22 June 2004 and 31 July 2004. “We are very pleased that more time is being given to the professionals to make disclosures covering the transitional period. This was an administrative nightmare in the making and it’s a practical and positive response to our concerns. Mr O’Carroll added: “We intend to continue working with the Revenue to minimise the demands of the regime on our clients. The changes are a welcome step in the right direction.” The IR and the Treasury have echoed they will continue discussions with the tax community on regulations, guidance and explanatory notes. Recommendations for tax avoidance will be finalised once the consultation process ends on 30 June. Jun 25, 2004 Email this article Printer friendly page Previous Page
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