Whether we like it or not, the General Anti-Abuse Rule (GAAR) is to be embraced by all of us by next year as per announced in Budget 2012 - a decision made by the Her Majesty Revenue and Customs (HRMC) to abolish the tax avoidance schemes that is seen as totally abusive and unacceptable for the importance of the United Kingdom herself. The HRMC feels the need to curb the problems of companies investing offshores, people not using banks for their businesses and daily transactions and the list go on just to avoid paying the high rate of taxes that they are obliged to. The government claims that GAAR is the ultimate solution to approach the United Kingdom tax system. The question is, how much do we really need GAAR to be imposed on our law systems? Some would say that GAAR is needed to stop the exploitations made by businesses and non-business taxpayers, while some would say that it is not as necessary when the rule is going to hurt many of those involved. Of course, there are pros and cons in every decision made, especially one like the GAAR that is going to affect the entire nation’s well being and they can be seen from the views of lawyers, accountants, and the public.
The enforcement of GAAR can be a burden or a bad thing to the HRMC based on the lawyers when many jobs are to be destroyed from the shutting down of the firms that are involved in this tax avoidance scheme. Let’s say BOOTS have to lay all of its workers and stop operating due to GAAR; this situation will only cause a large number of people to be unemployed with no income and this means that they are no longer the taxpayers of their incomes. The amount of taxes that the Government will lose is going to be huge and definitely not helpful to the slow-growing economy of the United Kingdom. Lesser tax collections are also a threat to those who are working in public sectors as well as the development of the country as a whole. The job losses are a big problem to HRMC likewise when the problem is...
Please join StudyMode to read the full document