“Could you interface with that team on its ad campaign that’s gone viral, and then circle back with me? If we can leverage similar assets, we’ll have a game changer.”
Among the top most annoying and overused terms in work settings today are “leverage” (used as a verb), “viral” (as in video), “interface” (a noun forced into verb territory), “socialise” (think animals in zoos, not cocktail parties) and “value-add” (a roundabout way to hyphenate added value).
When business or industry terms become overused, people stop paying attention to them. “Game changer” just does not mean what it used to. To be worthy of the label “game changer,” something must be unforeseeable. It must be unexpected to such a degree that everyone is talking about it, altering the way you look at and approach something completely.
While the budget pension bombshell ticked these boxes, the General Anti Abuse Rules have been less high profile although they are, arguably, no less radical.
Even if a tax-reducing strategy seems to achieve the desired outcome based on the words of the legislation, it will be possible for HMRC (through the application of GAAR) to secure a different tax outcome based on the intention behind and principles of the legislation. Basically, where the transaction(s) can be seen as abusive and delivering a tax outcome that “defies economic reality”, there is a safety net now in place.
This, in effect, undoes everything the British system of tax law has been based on.
HMRC have, to their credit, in some ways been clearer than the FCA in their pursuit of an outcomes-based approach. The advisory panel and guidance notes will carry, almost, a quasi-statutory effect because courts would have to refer to the guidance notes.
And there is a clear commitment to add to those guidance notes. Regularly checking out updates, as such, will be important for planners.
The latest version of the guidance notes gave specific direction on (and examples of) what will and what will not be affected by GAAR: there was confirmation that Isas, pensions, BPR, EIS and VCTs are all entirely acceptable and within the centre ground of planning. These solutions have all been specifically and explicitly given a clean bill of health, which takes care of pretty much 80 per cent of the planning people do.
But the provision of strong and clear assurance by advisers (for their clients) as to why, say, a VCT is acceptable and in no way contentious will be key.
Phil Wickenden is founder of So Here’s The Plan – email@example.com and @PhilWickenden