An individual will be denied a deduction in respect of employment-related liabilities incurred for the main purpose of avoiding tax.
Who will be affected?
The new measures will apply in respect of financial arrangements where the employee deliberately defaults in order to generate losses which lead to claims for sizeable tax repayments. The provisions are not intended to affect genuine cases which do not involve tax avoidance arrangements.
The measures will apply from 12 January 2009.
This is a further example of HM Revenue & Customs clamping down on what they perceive as unacceptable tax avoidance.