In my last blog I mentioned the need for us to wait for the consultation papers on ‘relief capping’ in the summer to see whether the fierce lobbying from the charity sector had been effective. Well clearly it has as we now have our third major tax U-turn in a week. Mr Osborne announced yesterday that the proposed relief capping rules would not now apply to charitable giving. The rules will still be implemented with regard to other reliefs.
What a relief for all those involved in the charity sector. What a demonstration to the rest of us of a knee jerk reaction to a problem that I am staggered the Chancellor was not aware of. He used the phrase ‘morally repugnant’ with regard to tax avoidance in his Budget speech and since then has indicated his surprise at the level of tax avoidance being undertaken by the wealthy. I could perhaps expect that level of ignorance from other ministers not directly involved in the country’s finances – but from the Chancellor!!!
As a tax practitioner I have no problem with the tightening of the tax rules where tax ‘abuse’ is being perpetrated but please can we have some well thought out and targeted initiatives that are fit for purpose and will hit the targets HMRC are after. In my view more of the sniper’s rifle and less of the shotgun please. With the latter too many innocent transactions and taxpayers, sorry customers, can be inadvertently affected. I am worried about the scope of the intended General Anti Abuse Rules which are in the pipeline as I fear this will be another shotgun.
So be careful with your tax planning as there may be a Chancellor coming your way having performed another U-turn!!