Well, the draft clauses for the 2013 Finance Bill were published on Tuesday and they included the provisions on the General Anti Abuse (no longer called Avoidance) Rule.

The provisions are like the proverbial curate’s egg – good in parts. The confirmation that the rule is only there to counter abuse is, to a certain extent, reassuring and the fact that the rule will only apply from the date of the Royal Assent of the 2013 Finance Act (probably July) and not 1 April 2013, as originally proposed puts off the ‘evil day’. I use the word evil, not because I think it is wrong to counter abuse of the tax system but because I still see a lot of problems.

HM Revenue & Customs are doing all they can to convince people that they are going to be reasonable. I do not mean to be cynical – OK I do – but everyone on ‘the ground’ knows that HMRC cannot be accused of being reasonable, so why should this be any different. In order to attempt to allay fears, that they will act heavy handed, they have introduced the concept of an advisory panel that will comment on the HMRC stance. However, the panel is just that, advisory and it remains to be seen what notice is taken of the panel’s views.

The idea of the panel and the general tenure of the legislation provides greater clarity on how things should work and certainly sets out a system of working that is closer to the original report by Graham Aaronson QC than the HMRC interpretation in June. Now all we need is for HMRC to fall into line. To get technical for a minute it requires them to accept that something is established practice and to apply, what has become known, as the double reasonableness test, as its intended to be.

I wait with bated breath (yes I am sick) as to what will happen. I am not confident when the use of trading losses of an earlier year, to reduce a current year’s profit is reported in the press (presumably with HMRC encouragement) as tax avoidance.