A group of top accountants, banks and lawyers met with the Treasury yesterday to broker a truce on how to tackle tax avoidance, but experts are still concerned the Government's measures are too broad.
The Government is determined to crack down on avoidance, which it says loses it £10bn a year as accountants become cleverer at devising schemes. A general anti-avoidance rule had been mooted, but this was met with fierce opposition from accountants.
The Chancellor this week opted for a disclosure system that will require the details of any scheme that avoids tax to be given in advance to the Inland Revenue.
Tax experts, from firms such as BDO Stoy Hayward, Grant Thornton and PricewaterhouseCoopers, were invited to the Treasury yesterday to discuss the system. This will fine those who do not disclose their schemes £5,000, and continued failure to disclose will attract a further penalty of £600 a day.
Many accountants, however, think the system will be extremely burdensome to both businesses and the Revenue. "The Revenue will be flooded with thousands of disclosures. Finding one that is unacceptable will be like looking for a needle in a haystack," Richard Collier Keywood, of PwC, said.
Mike Warburton, of Grant Thornton, also believes the Revenue, which is set to lose thousands of jobs, will not be able to cope with a disclosure system. The Treasury described the meeting as "constructive".
The Chancellor has also revealed he is going to throw more money at tax investigations, to bring in an extra £1.7bn over the next three years.