Scottish Liberal Democrat Leader Willie Rennie has today revealed the general anti-tax avoidance rule (GAAR) introduced by Scottish ministers has never been used as a compliance tool, despite being described as a “key feature” of the new rules which allow Revenue Scotland to take counter action against artificial tax avoidance schemes.
The rule was established by Revenue Scotland and the Tax Powers Act of 2014.
The GAAR is a specific compliance tool which operates as a deterrent against tax fraud and tax avoidance. It is recognised by stakeholders as being significantly wider than the UK General Anti-Avoidance Rule, which is based on the narrower test of ‘abuse’ rather than ‘artificiality’ of tax arrangements.
Willie Rennie commented:
“The General Anti Avoidance Rule was paraded as the magical solution to tax dodging in Scotland. Either there has been a miraculous change in the attitudes of tax dodgers or this rule is less effective than we were told.
“When ordinary families are paying their fair share of tax they expect the government to ensure the wealthy and large companies are doing the same.
“If the Scottish Government claim is serious about tackling tax avoidance head on why has it neglected to use one of the mechanisms it claimed was key to doing so? The quality of our public services rest on tax payer contributions. The SNP have the tools to ensure that happens. Why is this sitting on the shelf?”