Safeguards for the new GAAR?

HMRC has released more details on how the new General Anti Avoidance Rule ("GAAR") could apply from April 2013. One of the negative aspects of the proposals is the absence of a statutory or informal clearance procedure to determine whether or not the GAAR would apply to a proposed transaction. However the plan is that a number of safeguards will be built into the GAAR and these should provide sufficient certainty and protection without having to increase HMRC resources to the level which a clearance system would require. In particular

There is specific carve-out for non-tax motivated arrangements, even if these give rise to a tax advantage (provided the party who benefits can show that the arrangements were entered into entirely for non-tax reasons).

There will be an Advisory Panel consisting of members both from inside and outside HMRC who will provide opinions to HMRC and the taxpayer on the potential application of the GAAR to any particular arrangement.

Opinions of the Advisory Panel will be published in an anonymised form, and these, together with HMRC guidance, will be developed into a body of precedent which both taxpayers and HMRC can use in determining the scope of the GAAR. These proposed safeguards are obviously welcome but its questionable whether they will provide an effective alternative to a clearance procedure for businesses, who will inevitably view the GAAR as increasing uncertainty over the tax treatment of their transactions.