The Government also announced plans to modernise payments and penalties associated with stamp duty.Customs & Excise also announced measures that it said would protect pounds 1.5bn of future VAT revenue.There will also be measures to counter VAT abuse through misuse of the capital goods scheme, timing the submission of returns to exploit the repayment supplement provisions and assigning debts to third parties to reduce the amount of VAT due or claiming too much bad debt relief.Roger Trapp. Now, interest will arise if the documents are brought back into the country, for example, for a legal case. Hitherto, companies have been able to avoid paying stamp duty by travelling abroad, signing the documents and leaving them in the chosen country. This is expected to yield between pounds 50m and pounds 100m.In addition, the Inland Revenue announced its intention to crack down on “one-man companies”, or what it calls “personal service provision”.Noting that there has been concern about the hiring of individuals though their own service companies so they can exploit the tax advantages offered by corporates, it says it will be discussing the practical application of such measures with a view to introducing legislation in April 2000.Nicholas Woolf, tax partner with accountants Arthur Andersen, said that drawing the line between genuine self-employed contractors and those who are employees will be difficult for the Revenue – and that is the likely reason for the consultation.There was also an attack on the practice designed to avoid the payment of stamp duty. This is expected to yield pounds 130m a year.The other stops companies avoiding UK tax on tax haven income by protecting it through passing a large UK dividend through the controlled foreign company. In the meantime, draft clauses will be issued for consultation.While accountants noted that Mr Brown regarded the GAAR approach as an option for the future if more specific legislation did not deter tax avoidance, they were encouraged by the appearance of two measures aimed at sophisticated large companies.One stamps out the practice of avoiding capital gains taxation arising from the sale of a subsidiary through paying a dividend, selling the companyto an offshore subsidiary and then making the real “outside sale”.

However, a statement issued by the Inland Revenue and Customs & Excise after the Chancellor sat down announced a package of measures aimed at “securing the tax base” that was expected to yield more than pounds 1bn over three years and protect a further pounds 3bn of future revenues.
In addition, it is intended that next year’s Finance Bill will contain measures to modernise the Inland Revenue’s powers for the criminal investigation of suspected serious tax fraud. They had regarded the proposals issued by the Inland Revenue last autumn as likely to be highly disruptive to business. ACCOUNTANTS AND other tax experts warmly welcomed the Chancellor’s decision not to proceed with a general anti-avoidance rule (GAAR) for corporate direct taxes or a mini-GAAR for VAT on construction services. Rather, it is in the stability that sound public finances and low inflation are at last bringing to the British economy.Unfortunately for Mr Brown, for this to pay dividends in terms of the enterprise culture he strives for is going to take time, patience and a Government that stays out of everyone’s hair.. The biggest gift that Mr Brown has so far bestowed on British business has nothing to do with the gimmickry of yesterday’s Budget.

As all former chancellors know, that kind of luck does not go on for ever.Even so, there is no reason to start worrying unduly about the macro economy quite yet. Although the economy has not performed as well as hoped, the public finances have, with tax receipts coming in higher than expected and spending lower. To make the figures add up, however, the Chancellor is being forced to make some very optimistic assumptions about the outlook for the economy.So far he has been lucky on this front. Perhaps surprisingly, Mr Brown does not appear to be hitting the better off to pay for this limited degree of wealth distribution.The money is found courtesy of the present very healthy state of the public finances, as is the extra for government spending. There is a mild fiscal stimulus – amounting to pounds 6bn over three years – with the whole of that benefit directed at the less well off. The implementation is another matter altogether and it is hard to see how the meddling announced in yesterday’s Budget is going to add much to the party.On the other hand, the Chancellor continues to get it about right with the big numbers. He wants to dismantle the cartels and promote competition, to modernise our workforce through training and education, and above all to promote high-tech small business and entrepreneurialism as the road to salvation.Few people would contest the mission statement.