Customs & Excise’s (C&E) latest attempt to combat tax avoidance could result in unprecedented confusion for the property sector, accountant KPMG is warning.
The plans to introduce another general anti-avoidance rule (GAAR), which the accountant claims is aimed directly at developers, were published by C&E last week .
KPMG believes that the document will allow individual customs officers to decide if a scheme is designed to avoid tax. Officers could then decide how the transaction would normally have been structured and charge tax accordingly.
The decision on what is “normal” would be decided by C&E rather than under statute as at present.
Celia Brennan, head of indirect taxes at KPMG’s property group, said: “It is surprising that customs feels the need to float the idea of a mini-GAAR for the construction sector, which would be the first of its kind in any field. This broad brush approach can easily ensnare innocent parties in the net, and will leave purchasers of construction services with considerable uncertainty in their commercial planning.”
EGi News 26/01/99
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