Anti avoidance measures are announced
In a Parliamentary Written Statement on 12 January 2012 the Exchequer Secretary announced that he was taking steps, with immediate effect, to prevent abuse of the provisions that allow traders and others who have ceased their business but then incur expenses or fail to recover their trade debts to set those ‘losses’ against their other income.
It seems that artificial arrangements were being set up whereby such expenses would appear to have been created outside the UK so that taxpayers could claim the relevant relief in the UK.
The Government has published draft clauses, explanatory notes and a Tax Information and Impact Notice in respect of the changes.
The amount of tax at stake is reported in the national press to have been billions of pounds, while the Written Statement refers to substantial amounts.