Emergency Budget: comment from the Tax Bar on anti-avoidance

Given the short period of time between Alistair Darling’s last Budget and George Osborne’s ‘Emergency Budget’ it was not surprising to find that there were few targeted anti-avoidance measures.

In fact there were only two: the first being an extension of the de-recognition rules for loan relationships and derivative contracts reinforcing the fact that in this area tax follows the accounts unless it doesn’t; and the second being a measure to prevent corporates using authorised investment funds to create a credit for UK tax where none had been paid.

The Coalition policy document made it clear that tackling avoidance is to be a priority. However they appear to be adopting a very welcome albeit somewhat novel approach by taking ‘...a more strategic approach to the risk of avoidance to prevent increasing complexity and reduce the need for frequent legislative change. In this context the Government is tackling...