The new catch-all anti-avoidance tax law proposed by Gordon Brown in his last Budget may not be as wide reaching as first thought.

It would appear that the law currently being drawn up by the Inland Revenue is likely to exclude corporate deals less than £l million and also will not be applied to individual taxpayers.

While the Chancellor favours the idea of a general anti-avoidance rule - not surprisingly because it might increase tax yields significantly - he is nevertheless keen to ensure that the law does not catch out everyday commercial decisions made by companies.

Crucially, however, the law would still allow the Revenue to judge business transactions to see if they were inspired by or had the effect of tax avoidance.

The major problem which needs to be overcome is to ensure that the law does not create a bureaucratic nightmare, where the Revenue becomes a clearance system for mergers and acquisitions.

If not careful, the law could affect commercial deals because advisors will qualify their advice and companies will want to obtain clearance from the Inland Revenue before proceeding.

As a result the Inland Revenue is looking at a series of exemptions to radically reduce the number of deals to which the law might apply.

These exemptions would allow finance leases to be issued to maximise tax benefits and the continued use of tax breaks introduced by law.

However, the law will only be a success if it is restricted to the limitation of real abuses and that remains to be seen.

Phillip Woodrow is a partner at Baker Tilly in Bradford

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