We have had a thorough debate. I do not intend to reprise all my earlier arguments, but I want to pick up some of the points that hon. Members have raised. The issue of the yield for the loss-buying rule was raised by the hon. Member for Newcastle upon Tyne North (Catherine McKinnell). It is around £200 million a year, but there is a more precise breakdown available in the tax information and impact note.
Several hon. Members have mentioned the general anti-abuse rule—the GAAR—which is expected to raise around £235 million over the next five years. It will also protect revenue that would otherwise be lost. We believe that it will change the avoidance landscape as its impact starts to be recognised. It will act as a deterrent to those tempted to engage in abusive avoidance schemes, and where those schemes persist, the GAAR will give HMRC the means to tackle them and to secure payment of the right amount of tax.
We have accepted the proposal from Graham Aaronson that a narrowly targeted GAAR is the right approach to tackling the persistent problem of abusive avoidance schemes. This has to be viewed in the context of the fact that the previous Government did not bring in a general anti-abuse rule. We believe that a broader rule would be likely to generate considerable uncertainty, which could lessen the attractiveness of the UK as a place to do business, and generate significant cost for HMRC. We are not complacent, however, and we will continue vigorously to tackle all forms of tax avoidance. Indeed, the Bill will close 10 loopholes, and the Budget announced further reviews of tax law that is being exploited for avoidance.
Simply because a scheme is not caught by the GAAR will not mean that it is okay. The GAAR will not set the boundary for tax avoidance. It deliberately targets abusive avoidance schemes, but HMRC will continue to tackle all forms of tax avoidance using the full range of tools available. As for the argument that we will not need targeted anti-avoidance rules in future, we believe that it would be reckless to remove a central protection against avoidance without being fully confident that doing so would not create risks. Although we expect the proposed GAAR to be effective in tackling and deterring abusive tax avoidance schemes, it might take time for those who engage in persistent avoidance to accept that their schemes do not work, so there will still be a need to retain existing anti-avoidance provisions and amend other legislation that provides unintended tax planning opportunities that are not within the scope of the GAAR.
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With regard to a review, as advocated by the hon. Member for Newcastle upon Tyne North, it will take some time to make a proper assessment of the GAAR. It is a new and unfamiliar addition to UK tax legislation and will need a bedding-in period to allow taxpayers and advisers to get to grips with it. We have not ruled out future action to strengthen the deterrent impact of the GAAR by attaching penalties if necessary, and we will keep the matter under review. I cannot set a definitive time frame, as we shall need to monitor carefully what happens, but I am encouraged that there is increasing
evidence that these abusive schemes are declining as the GAAR comes nearer into prospect. If the GAAR continues to deter such schemes, we might have to wait a little longer to review it, as my hon. Friend the Member for Amber Valley (Nigel Mills) pointed out.
Let me turn to the advisory panel and its role and personnel. It is important that panel members have the necessary experience and expertise to carry out this important task, which means that people with a tax background must be involved. I have been struck by the broad agreement across tax advisers and business that the sorts of abusive schemes the GAAR targets must be dealt with, and I have every confidence that the advisory panel will undertake its role fairly and effectively. It is worth pointing out that the interim panel had a broad range of interests and expertise from within the tax world.
With regard to the panel’s membership, a public advert was placed and there was a very encouraging response, with 60 people applying. I do not know whether the hon. Member for Bassetlaw (John Mann) was among them, but I am sure that his application, if he submitted one, would have been viewed with as much sympathy as his application to sit on the Finance Bill Committee was viewed by the Opposition Whips Office. I understand that the process in relation to the advisory panel is well advanced and that the chairman will be making his recommendations shortly. I understand that applicants came from a wide range of professional and business backgrounds, but I am not party to the details.
Finally, with regard to beneficial ownership and whether the list should be made publicly available, the Government acknowledge that there are potential benefits to making information on who owns and controls companies available to the public. There are also legitimate concerns, so we will consult on whether the register should be publicly available. With those points of information and clarification, I hope that the new clauses and schedules that stand in my name can be part of the Bill and urge the hon. Member for Newcastle upon Tyne North not to press new clause 12.
Question put and agreed to.
New clause 4 accordingly read a Second time, and added to the Bill.