Coinciding with widespread coverage and public condemnation of tax avoidance schemes used by celebrities such as Jimmy Carr, the General Anti Tax-Avoidance Principle Bill had its first reading in the House of Commons yesterday.
The complete bill is yet to be prepared for publication, although Meacher, who presented it, received support from Sir Alan Beith (LD), Sir Peter Bottomley (Con), Tom Brake (LD), Frank Dobson (Lab), Andrew George (LD), Helen Goodman (Lab), Kelvin Hopkins (Lab), Martin Horwood (LD), John Mann (Lab) and Austin Mitchell (Lab),
It would “introduce a principle that any financial arrangements made by a company or individual should not have as their primary purpose the avoidance of tax; to establish a statutory rule to apply in the assessment of such arrangements; and for connected purposes”.
In a post on his own website, Meacher further explained how the bill could curb the usage of tax avoidance schemes.
“It will transfer the burden of proof, from HMRC having to prove that a transaction was really a disguised tax avoidance device, to a company having to prove that it had a genuine purpose,” he said.
“If HMRC believed for good reasons that it was really for tax avoidance purposes, they could declare that the transaction was null and void and it would be for the company, if they so chose, to challenge that decision in court.”
He added it would also make accountant and lawyer originators liable for prosecution for seeking to pervert the will of Parliament.