ABSTRACT
This chapter explores the various criticisms which the GAAR has attracted. The majority of the criticisms are from practitioners. Criticisms of the main tests within the GAAR will be examined, including the main purpose test and the double reasonableness test. The chapter examines the potential problems with the GAAR when it is “applied in the real world”. Moreover, there have been criticisms regarding the extent to which the GAAR guidance can be relied on by taxpayers and tax advisors. The extent to which taxpayers can rely on the HMRC GAAR guidance and whether it is, in fact, binding on courts is uncertain. The guidance is important as the “HMRC guidance and explanation on the scope and meaning of the legislation pervades all areas of the tax code”. The GAAR is a significant piece of legislation which has introduced substantial changes in the tax system. The GAAR has also been criticised for increasing the uncertainty in the tax system.
