Disclosure rules on tax schemes still confusing

The new Revenue rules requiring advisors and accountants to inform them of 'tax avoidance schemes' are continuing to cause concern among the accountancy fraternity.

The tax avoidance disclosure rules have caused widespread controversy and confusion since they were announced in this year's Budget.

Mike Warburton, senior tax partner at Grant Thornton, said: "There is still a great deal of confusion over these rules. If the Revenue refuses to confirm who will be caught and who won't, it will be impossible for people to do their tax planning and for providers to sell many types of trusts.'

The new disclosure rules, which came into effect on August 1, 2004, provide the Revenue with earlier information about what it sees as 'potential tax avoidance schemes', which, it claims will 'enable the Government to make a swifter and better-targeted response, and will deter the creation of contrived and artificial schemes whose main purpose is to avoid tax.

The Revenue produced a set of guidelines on the type of schemes which need to be disclosed just a couple of days before the start of the new regulations.

At the time, the Paymaster General, Dawn Primarolo, claimed that they were a vital part of the battle against tax avoidance.