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UK tax law is specifically targeted rather than purposive: in tackling the exploitation of loopholes in the law, governments have legislated against individual avoidance schemes as and when these have come to light.  Often the response to this legislation has been the creation of new schemes to circumvent the law, which in turn has seen further legislative action – an ‘arms race’ between the revenue authorities and Parliamentary counsel on one side, and on the other, taxpayers aided and abetted by the legal profession. 

Over the past twenty years many commentators have suggested having legislation to counter tax avoidance in general; that , a ‘General Anti-Avoidance Rule’ might dissuade the most egregious efforts to avoid tax, encourage taxpayers and legal counsel to redirect their energies to more productive activities and allow the authorities to simplify the law without fear of it being systematically undermined.

In its first Budget in June 2010 the Coalition Government announced it would consult on this issue,[1] and in December a study group, led by Graham Aaronson QC, was established to explore the case for introducing an anti-avoidance rule.[2]   Mr Aaronson completed his report in November 2011, in which he recommended a narrowly focused rule targeted at ‘abusive arrangements’ only.[3]

In June 2012 the Government launched a consultation exercise with a view to introducing a General Anti-Abuse Rule (GAAR) in 2013,[4] confirming its plans in December 2012.[5] Provisions in the Finance Bill 2013 for the new GAAR were agreed, without changes, and the new rule came into force on 17 July 2013.[6]

In July 2017 HM Revenue & Customs made an appeal to the independent GAAR Advisory Panel on the application of the GAAR to a specific avoidance scheme for the first time – an appeal that was successful.[7] Since then all those cases referred to the GAAR Advisory Panel have resulted in a Panel opinion in HMRC’s favour.[8]

This paper looks at the introduction of the new GAAR, while a second paper looks at earlier debates over the case for a GAAR over the last twenty years.[9] Other developments in the Government’s efforts in recent years to tackle both tax avoidance and tax evasion are discussed in a third Library paper.[10]


[1]     Budget 2010 HC 61 June 2010 para 2.114

[2]     HC Deb 6 December 2010 cc1-3WS

[3]     HC Deb 21 November 2011 cc2-3WS; HM Treasury press notice 130/11, 21 November 2011

[4]     HMRC, A General Anti-Abuse Rule (GAAR) – consultation document, June 2012

[5]     Autumn Statement, Cm 8480 December 2012 para 1.178; see also, Budget 2013, HC 1033, March 2013 para 1.211

[6]     HM Revenue & Customs’ detailed guidance is published on

[7]     HMRC, GAAR Advisory Panel opinion: employee rewards using gold bullion, 7 August 2017

[8]     The GAAR Advisory Panel publish their decisions on see also, PQ249975, 8 May 2019; PQs 237714-5, 1 April 2019.

[9]     Tax avoidance: a General Anti-Avoidance Rule – background history (1990-2010), Commons Briefing paper CBP2956, 16 January 2020

[10]    Tax avoidance and tax evasion, Commons Briefing paper CBP7948, 7 April 2021

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