Details of the Schedule
29.Schedule 41 sets out procedural arrangements for the GAAR, including the arrangements for the GAAR Advisory Panel. It explains how matters are referred to the Panel, time limits, what information is to be provided (and how), and how the Panel’s opinions are delivered.
30.Paragraph 1 defines “the GAAR Advisory Panel” and “the Chair”.
31.Paragraph 2 defines “designated HMRC officer”.
32.Paragraph 3 requires a designated HMRC officer (“designated officer”) to notify a taxpayer in writing where the officer considers that the taxpayer has obtained a tax advantage which should be counteracted under the GAAR and lists the information which must be contained in the notice.
33.Paragraph 4 specifies that the taxpayer has 45 days from the day on which the notice is given to provide written representations in response to the notice to the designated officer. The designated officer may extend the 45 day period at the written request of the taxpayer.
34.Paragraph 5 provides that, if no representations are made by the taxpayer, a designated officer must refer the matter to the GAAR Advisory Panel (the “Panel”).
35.Paragraph 6 requires any representations made by the taxpayer to be considered by a designated officer. If the designated officer considers that counteraction is still appropriate the matter must be referred to the Panel.
36.Paragraph 7 sets out the information which must be provided to the Panel by the designated officer when making a referral. This includes any comments which the designated officer has on any representations made by the taxpayer.
37.Paragraph 8 requires the designated officer to notify the taxpayer (at the same time as the referral is made) that the matter is being referred to the Panel and lists the information which must be included with the notice.
38.Paragraph 9 allows the taxpayer 21 days, from the day on which the notice under paragraph 8 is given, to make written representations to the Panel about the notice sent by the designated officer under paragraph 3 or about any comments provided to the Panel by the designated officer under paragraph 7(b). The Panel may extend the 21 day period at the written request of the taxpayer.
39.Paragraph 10 sets out the arrangements for the Chair to appoint a sub-panel of the Advisory Panel to give an opinion on cases, and how information is provided to the sub-panel.
40.Paragraph 11 requires the sub-panel to produce either one opinion notice stating the joint opinion of all sub-panel members or two or three opinion notices which together state the opinions of all sub-panel members. Sub-paragraph (2) requires the sub-panel to give a copy of the opinion notice(s) to the designated officer and the taxpayer.
41.Sub-paragraph (3) explains what must be included in an “opinion notice”, confirming that the sub-panel members must consider whether the entering into and carrying out of the tax arrangements is a reasonable course of action in relation to the relevant tax provisions, taking account of the various circumstances and indicators listed in section 206. An opinion notice must also include the reasons for the opinion.
42.Sub-paragraph (4) notes that, for the purposes of giving their opinion(s), the sub-panel is to assume that the arrangements are tax arrangements.
43.Sub-paragraph (5) notes that a reference to any opinion of the Panel in Part 5 is a reference to the contents of any opinion notice.
44.Paragraph 12 requires the designated officer to consider the opinion of the Panel and then notify the taxpayer in writing as to whether or not the tax advantage is to be counteracted under the GAAR. If the notice states that the tax advantage is to be counteracted, sub-paragraph (2) requires the notice to specify, in addition, the adjustments required, and any steps required to be taken by the taxpayer, to give effect to the counteraction.
45.Paragraph 13 clarifies that a designated officer may take any action under Schedule 41 where the officer considers that a taxpayer might have obtained a tax advantage. Therefore, any notice given by a designated officer under this Schedule may be given on the assumption that a tax advantage has been obtained.
