A taxpayer operates a small business making annual profits of approximately £20,000. He has no need for limited liability but incorporates his business (taking a modest salary and drawing the rest of the profits by way of dividend) solely for the overall tax savings.
It is the authors’ view that this situation should not be caught by the GAAR.
It is noteworthy that HMRC’s Guidance appears to agree. This is not found in the detailed examples but within the main body of the text: