Tax avoidance disclosure

In July 2004 legislation was passed bringing in a new tax avoidance disclosure (TAD) regime requiring the disclosure of certain types of tax avoidance arrangements shortly after they are sold. In 2006 the rules were significantly updated. There are currently TAD regimes applying to direct tax, VAT and stamp duty land tax (SDLT). It is expected that there will also be an extension to national insurance at some point.

At PricewaterhouseCoopers, we wholeheartedly support the concept of full disclosure of tax planning to the tax authorities – it is how we and our clients have always operated. Our business is providing our clients with advice on how best to manage their tax affairs so they comply fully with tax law, and we play a major role in helping our clients decide whether or not to carry out a particular aspect of tax planning by analysing the risks and benefits of a strategy.

The TAD provisions have simply brought forward the date of disclosure to the tax authorities. However, our view has consistently been that it is important the disclosure rules are practical and do not impose an unreasonable burden on advisers, their clients or indeed the tax authorities. As a result we have continued the dialogue with the tax authorities and are pleased to have contributed to the consultation process that has shaped the direct tax rules.

For direct tax, new regulations were issued in June 2006, and the new regime commenced on 1 August 2006. The changes were significant and included:

• a widening to cover all corporation tax, income tax and capital gains tax; and
• a requirement for businesses to disclose in-house schemes within 30 days, rather than when returns are filed.

We will continue to consult with the Government and HM Revenue & Customs to improve the quality of the UK's tax law for the benefit of our clients and will remain fully engaged in the tax disclosure debate.