Tax lawyers have attacked a government clampdown on VAT tax evasion, claiming that legitimate clients will suffer.
Last week Customs and Excise published a draft 'catch-all' tax law, designed to stop companies avoiding the payment of VAT by constructing tax avoidance schemes.
The new law will attempt to disqualify any form of tax planning that falls within a broad definition of avoidance.
But leading lawyers attacked the plans – which the Paymaster General, Dawn Primarolo, said would stamp out "creative tax advice".
Linklaters tax partner Simon Clark said businesses which legitimately sought tax advice would find themselves being investigated by Customs & Excise.
His colleague Martin Lynchehan said the change would simply mean more work for lawyers. He said the reforms would create uncertainty for clients. He was sceptical about the Government's claims that it is losing £1bn a year through tax avoidance.
Edward Troup, a tax partner at Simmons & Simmons, said that the Government should draw up specific anti-avoidance legislation, rather than attempting to produce a catch-all law.
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