Finance Bill

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Dr. Pugh: I defer to the Paymaster General on matters of procedure. On matters of brute fact, she can go to the Inland Revenue portal site today—Members can check this later—and she will see a sign about the benefits of skilled migrant workers coming into this country. That has nothing to do with the taxation system, but it is there. Committee members can inspect it for themselves.

Dawn Primarolo: There is nothing on the Inland Revenue website that does not concern tax information, and the hon. Gentleman should apologise for such assertions. The website carries only taxpayer information, as it is required to do.

On the amendment, I have made the point that the affirmative procedure would not take the hon. Member for Buckingham any further forward. The heart of the assurances that he sought concerned the consultation and discussion. The negative resolution procedure is perfectly reasonable, has always been used and works well, but I accept that it will be necessary for the Inland Revenue to consult representative bodies and software developers about the necessary developments. It is not about an Inland Revenue software system, but about all the providers and designers in the market being able to develop software packages. The discussions with the Inland Revenue will only concern ensuring that the relevant information is supplied in the packages and that they

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are compliant. It is not as if the Inland Revenue is putting in a huge system.

For the Committee's information, the first set of draft regulations will be published in March 2003, and a period of consultation will follow before they are finally tabled. Any Member who is keen to discuss them will be welcome to receive a copy of the draft regulations and comment accordingly on it. In that way, the hon. Member for Buckingham gets consultation and a longer period, which is much better than an affirmative resolution procedure that does not provide for that. Although it is not everything that he wanted, I hope that he will feel that I have met him halfway and that he can withdraw his amendment.

Mr. Bercow: The Paymaster General has offered me half a slice of cake, and it would churlish of me to throw it, crumbs and all, back in her face. I do not agree with her view on the negative procedure, but I agree that the regulations' content, enforceability and acceptability are what really matter.

I have another reason for not only enthusiasm but perhaps even joy. The Paymaster General referred to the draft regulations that are to be published in March next year, followed by a thorough consultation. The reason why that makes me enthusiastic and perhaps even joyful is that I am sure that the Paymaster General proposes to act in that way because she has taken heed of the title and contents—''Regulations on Small Businesses (Reduction)''—of the ten-minute Bill that I had the great privilege to present on 27 April 1999. As she has followed my lead and been so generous this afternoon, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.45 pm

Mr. Luff: On a point of order, Mr. Gale. In the interests of making progress, I will not move new clause 15. However, I hope that the Paymaster General, who would have responded to that debate, will be prepared to engage in correspondence on the issues that I wanted to raise.

Dawn Primarolo: I am happy to write to the hon. Gentleman to give him chapter and verse on why his new clause is unnecessary.

The Chairman: Happily, that is not a point of order for the Chair, but the Committee has heard it. I have listened to the debate carefully and am satisfied that the matters arising from clause 132 have been fully discussed.

The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendments proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill.

Question agreed to.

Clause 132 ordered to stand part of the Bill.

Clauses 133 and 135 to 140 ordered to stand part of the Bill.

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New Clause 21

Parliamentary visits to eu candidate countries: tax treatment of members' expenses

    '(1) This section amends—

    (a) section 200 of the Taxes Act 1988 (which treats allowances paid to a Member of Parliament in respect of, among other things, expenses of visiting the national parliament of another member State as not being income for tax purposes), and

    (b) section 200ZA of that Act (which makes corresponding provision in relation to members of the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly).

    (2) In subsection (3)(b) of section 200, and in paragraph (b) of the definition of ''EU travel expenses'' in subsection (3) of section 200ZA, after ''of another member State'' insert ''or of a candidate country''.

    (3) After subsection (3) of each section insert—

    ''(4) In subsection (3) above ''candidate country'' means Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, the Slovak Republic, Slovenia or Turkey.

    (5) The Treasury shall by order made by statutory instrument make such amendments to the definition in subsection (4) above as are necessary to secure that the countries listed are those that are from time to time candidates for membership of the European Union.''.

    (4) This section applies in relation to sums paid on or after 1st April 2002.'.—[Dawn Primarolo.]

Brought up, and read the First time.

Motion made, and Question proposed, that the clause be read a Second time. [Dawn Primarolo.]

Mr. Flight: We do not oppose the new clause, but I cannot resist pointing out that it simply adds to the number of swan visits that Members of Parliament can make around the European Union. These tend to bring the EU into disrepute because so many such visits are manifestly not about serious politics, but about having a good time.

Dawn Primarolo: The new clause follows the resolution of the House of Commons that was passed in May to extend the range of destinations covered by the House travel scheme to meet the costs of visiting EU institutions or national Parliaments. It follows automatically from the agreement of the House. I should point out that few Parliaments meet at the weekend, and before MPs are entitled to make those trips, they must agree to adhere to the strict rules of the House. Members must apply for the visit and detail who they will meet and when, and what they will discuss. Only when the Fees Office gives clearance is the trip authorised to take place. The hon. Gentleman's point is simply not true. The new clause provides for the proper business of the House.

Chris Grayling (Epsom and Ewell): Why do Members of the devolved Assemblies need the right to travel to EU candidate countries?

Dawn Primarolo: Because with some of the candidate countries' structures and devolving of powers—I am thinking of Germany, for example, and the division of powers within its democracy—it is appropriate to provide for that measure within the safeguards that I have explained. If the Fees Office has not sanctioned a visit as legitimate, the new clause will

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not apply and the MP will not have his costs covered. The measure will work perfectly well in relation to the current provisions. I am sure that no member of the Committee wishes to reduce hon. Members' ability to achieve a greater understanding of other countries' Administrations and practices, which they can then use to the benefit of debates in the House.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 6

Arrangements with respect to payment of corporation tax

    '.—(1) After subsection (2)(d) of section 36 of the Finance Act 1998, insert—

    ''(da) may make provision for members of the group of companies to elect to base this corporation tax payment on the previous year's taxable profits;''.

    (2) In section 59E(1) of the Taxes Management Act 1970, at end insert—

    ''such that for a company:

    (a) payment of corporation tax shall be paid in four annual instalments (for the purposes of this subsection the 'Instalment Date');

    (b) the corporation tax payable on each of the first, second and third Instalment Dates shall be equal to one quarter of the total corporation tax paid by the company in the immediately preceding year of assessment;

    (c) the corporation tax payable on the fourth Instalment Date shall be equal to the aggregate of—

    (i) one quarter of the total corporation tax paid by the company in the immediately preceding year of assessment; and

    (ii) the difference between the total corporation tax liability of the company concerned for the year of assessment in which the fourth Instalment Date falls and the corporation tax liability of the company in the immediately preceding year of assessment.''.'.—[Mr. Flight.]

Brought up, and read the First time.

Mr. Flight: I beg to move, That the clause be read a Second time.

We touched on the contents of this new clause earlier. It seeks to give companies the choice of paying their tax instalments based on the previous year's taxable profits, which would greatly reduce the administration and the costs to companies that currently must estimate annual taxable profits five and a half months before the end of the accounting period. Failure to perform a reasonable estimate leads to interest penalties being levied. That means that companies have to calculate their tax liabilities at least three times: once for each of the payments in months seven and 10 of the accounting period and once for all payments after the end of the accounting period. It is an unnecessary burden. The ideal solution would be to make the arrangements similar to those for individuals' payments on accounts, based on the previous year unless reasonable evidence exists to show that it is too high.

The regulations are in a statutory instrument, so in a sense this is a probing amendment to raise the point. When we touched on it before, the Minister replied that the rules did not need to be changed because the

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rate of interest on unpaid tax had been reduced. Although that is true, it does nothing about the cost burden and administrative burden to companies in having to make all those calculations. They need to show that they have calculated their payments on account to the best of their knowledge and belief where lack of evidence leads to penalties. Why should it not be accepted that companies cannot make an accurate payment on account? There are not many other examples of payment on account where the payer has both to estimate what the final liability might be and pay interest if the estimate is incorrect.

 
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