Courts find against two avoidance schemes – are new rules really needed?

We wrote recently about HMRC’s consultation on ‘Raising the Stakes on Tax Avoidance’, with new proposals to target the promoters of avoidance schemes.
Two recent cases heard by the courts considered whether two such complex schemes were actually effective.
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The First Tier Tribunal (FTT) ruled that PAYE tax and National Insurance Contributions should have been paid on bonuses paid to directors through companies which were specially set up to receive funds, and then be liquidated, paying out the cash in the process.
The scheme was promoted by accountancy firm Barnes Roffe LLP, and would presumably be the target of the new rules, with the scheme having been used by 104 other companies to try to avoid PAYE/NICs on bonus payments.  The scheme was DOTAS registered however.
The defendants’ case revolved around the Ramsay principle but this was dismissed; the tribunal ruled that the scheme had no commercial purpose, other than the intended obtaining of a tax advantage.  As such PAYE/NICs was found to be payable on the bonuses.
P&O avoidance scheme
British shipping company P&O also lost its case, concerning a convoluted international tax avoidance scheme, designed to avoid paying corporation tax.
P&O had attempted to gain £14m in tax relief by artificially boosting the tax credit due on dividend income.
The scheme was found to fail by the FTT, who ruled that the transactions were all part of an “elaborate trick” that was “designed and implemented for no reason other than tax avoidance.”
Conclusion
In both cases, the fact that the schemes were implemented for no reason other than tax avoidance was found to be of importance by the courts.  This is before the new General Anti-Abuse Rule (GAAR) is even taken into account.
With the courts already finding against such schemes, and the new GAAR set to undermine such schemes still further, it is reasonable to question whether any new provisions on avoidance are really needed.