People who market tax avoidance schemes now have to tell the Revenue what they are doing and how it is supposed to work; not surprisingly, the Revenue then change the rules at the earliest opportunity so that it will not work any more.
These disclosure rules will be extended from 1 July 2006 to cover the whole of income tax, corporation tax and CGT, as long as the scheme meets certain "hallmarks". Up to now, the requirements were more restricted.
The Budget closes down a number of specific schemes, some of which have been revealed by the disclosure rules. These are mainly highly technical arrangements dreamed up by very clever lawyers, and only those who already know they are using them could be affected.
Restrictions are also to be imposed on reliefs enjoyed by a charity which has dealings with its substantial donors, or with a person who controls the charity.
Charities which carry on a trade can be exempt from tax on the profits as long as the carrying on of the trade is part of the charitable objectives (e.g. an educational establishment) or it is carried on by the beneficiaries of the charity (e.g. sales of goods produced by disabled people). The exemption can be lost altogether if the charity has a single trade which only partly qualifies, and the non-qualifying part has a turnover greater than £50,000 or more than 10% of the total.
The Budget has announced a relief which will formalise a Revenue concession to help charities in such a position. It will be possible to treat the charity as carrying on two separate trades - one that qualifies for exemption in full, and one that does not at all. This will apply for chargeable periods starting on or after 22 March 2006.
Olympics and Paralympics 2012
In long-term preparation for 2012, measures will be introduced to exempt from UK taxation the bodies running the Olympic Games and also non-UK resident athletes from the possibility of taxation on appearing in the UK at the Games. The Chancellor also took the opportunity to announce a number of funding measures to try to ensure success for British athletes.