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Comment: Disguised remuneration: an unholy mess of debt cap proportions.
The Exchequer Secretary for the Treasury faced a barrage of criticism in Standing Committee last week over the form of the disguised remuneration rules and the number of Government amendments to it.
The Government has made much of its new approach to making tax law. It has announced a new timetable for tax reform and a new framework for consultation, both of which are designed to produce better consultation and, it is hoped, better legislation.
Against this background the disguised remuneration rules must be something of an embarrassment. The rules were announced, without prior consultation, on 9 December 2010. Since then HM Treasury and HMRC have certainly been willing to discuss possible carve-outs and exceptions to ameliorate the harshest effects of the new rules, but the underlying principles remain.
The result - following the raft of Government amendments last week - is unwieldy complex legislation, littered with numerous exceptions and exceptions to exceptions. It is hardly an advert for the new approach and bears all the hallmarks of legislative disasters under the previous Government such as the introduction of the debt cap and the reform of the remittance basis of taxation.
Some allowances have to be made. This is anti-avoidance legislation in an area where avoidance has been particularly rife. But surely some consultation, however informal, could have produced a better result than this?
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25 May 2011
Author: Ashley Greenbank
