The Government has announced a consultation into new laws aimed at preventing tax avoidance; however, they will be less comprehensive than those enacted by other countries.
The consultation follows an independent review led by Graham Aaronson QC.
Tax avoidance measures have become a focus for governments who have faced criticism that they have enacted harsh austerity measures without tackling the issue of legal non-payment of tax by companies.
However, the news that the Government has watered down the new laws has done little to assuage businesses and their legal advisers.
Heather Self is a director of law firm Pinsent Mason, she told the Financial Times: "These proposals present a massive headache for UK businesses and individual taxpayers."
The Government's proposals are known as 'General Anti-Avoidance Rules' (GAARs) and will target tax-avoidance schemes which are complex or novel and were not envisaged when tax laws were created.
Tax-avoidance measures will be targeted if they are 'abusive', which is defined as those which cannot be regarded as a reasonable course of action in all the circumstances.
Richard Baron is the head of tax at the Institute of Directors.
"The drafting is by no means perfect yet. The phrase 'a reasonable course of action' is a key pillar of the proposals, but the draft does not tell us what 'a reasonable course of action' is," he said.
Last month Barclays' chief executive Bob Diamond hit out after Barclays was publically targeted under existing anti-avoidance measures.
The implementation of the new laws has also come under criticism, with some commentators claiming that the fact that the Government will not give businesses a clearance mechanism will deter them from investing in the UK.
Chris Morgan is head of tax policy at KPMG.
"It will make the UK less competitive. Inward investors will have a sword of Damocles over their head. Either they will do no planning at all or they will do it not knowing when this will be invoked," he told the Financial Times.
Source:
Tax avoidance law under fire (The Financial Times - free signup)
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