The General Anti-Abuse Rule (GAAR) was enacted in Finance Act 2013 following a long period of consultation, between 2010 and 2013, in which ICAEW was heavily involved.
The GAAR is designed to bring to an end abusive tax arrangements which fall foul of a double reasonableness test; that is, “arrangements which cannot reasonably be regarded as a reasonable course of action in relation to the relevant tax provisions.”
Cases are referred by HMRC to the GAAR Advisory Panel to ensure that they do genuinely fall foul of the double reasonableness test.
Paragraph B14.1 of the GAAR guidance states:
“The procedure for applying the GAAR to any arrangement requires that the proposed application of the GAAR should be put before an advisory panel, independent of HMRC, who will give their opinion (or opinions if they are not unanimous) as to whether the arrangements in question constitute a reasonable course of action.”
Three Opinions were published in December 2017 and you can read the news report we published at the time by clicking here The first Opinion Statement was published in August 2017 and you can read our report by clicking here.
HMRC tells us that:
“The Panel expects a flow of referred cases to consider in 2018 and beyond. The Advisory Panel will also, in due course, provide independent opinions for cases referred under the new penalty for Enablers of defeated tax avoidance, which was introduced in Finance (No.2) Act 2017. The Advisory Panel also reviews, and has approved, HMRC GAAR guidance.”
Five of the existing 11 members are standing down in 2018.
Up to six new members are being recruited from across the country..
Details of the application process are available by clicking here.
The responsibilities of panel members are described below:
“Each Panel member will be expected to have knowledge and expertise in relation to one or more of the taxes covered by the GAAR, and to be committed to making the GAAR legislation work efficiently and effectively. The aim is to have a Panel that is broad based, balanced and cohesive. The number of Panel members is flexible in order to meet these objectives.
The time commitment will be around 5 afternoon Panel meetings a year (the majority are likely to be face to face meetings in London), a further around 5 one-hour conference calls, and preparatory reading. Further workload will be involved when a member is on a case sub-Panel. When a sub-Panel is needed for a referred case, discussion takes place in advance with Panel members over the additional time commitment and their availability before a sub-Panel is appointed.”
Applications must be sent in by noon on Monday 5 March 2018