The Economic Secretary to the Treasury (Justine Greening)
On 12 August 2011 the Government announced a change in legislation to prevent tax avoidance. The Government have set out a clear strategy on preventing tax avoidance and will not hesitate to take action to stop those who seek to obtain an unfair advantage by exploiting unintended tax loopholes. This measure demonstrates the Government’s commitment to act quickly to close loopholes when this happens.
The Government became aware that an avoidance scheme was being promoted that sought to take advantage of an exception from certain capital allowances anti-avoidance rules provided by section 230 of the Capital Allowances Act 2001 (CAA). The scale of the tax potentially put at risk by the scheme was such that the Government decided to announce that section 230 CAA will be repealed by legislation introduced in Finance Bill 2012 in relation to expenditure incurred on or after the beginning of 12 August 2011, to the extent that section 230 provided an exception from section 217.
HMRC published a statement on their website (www.hmrc.gov.uk/budget-updates/hmrcstatement-12Aug.pdf) on 12 August explaining the change, together with a technical document containing draft legislation which the Government intend to include in the next Finance Bill.