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Tax Avoidance

Volume 497: debated on Tuesday 13 October 2009

To ask the Chancellor of the Exchequer (1) whether employment loss liabilities fall within the ambit of the Paymaster General's statement of 2 December 2004 on anti-avoidance measures; and if he will make a statement; (289824)

(2) whether tax schemes which do not involve the extraction of income from a company by an employee in a manner which is free of PAYE, income tax and national insurance contributions fall within the ambit of by the Paymaster General's statement of 2 December 2004 on anti-avoidance measures; and if he will make a statement.

The Paymaster General's statement of 2004 warned that where we become aware of arrangements which attempt to frustrate our intention that employers and employees should pay the proper amount of tax we will introduce legislation to close them down, where necessary from 2 December 2004.

It remains the Government's view that in rare cases, whether in the field of employment income or more widely, it will be appropriate for us to act retrospectively to ensure that abusive schemes are closed down rapidly and effectively. Section 68 of Finance Act 2009, dealing with employment losses was one such example.