Joint Committee on Tax Law Rewrite Bills Minutes of Evidence


APPENDIX 2

EXTRA-STATUTORY CONCESSIONS NOT REWRITTEN

  1.  Many concessions are made to deal with minor or transitory anomalies under the legislation. Others meet cases of hardship at the margins of the tax code for which a legislative remedy would be difficult to devise or would run to a length out of proportion to the intrinsic importance of the matter. The Bill does not therefore include concessions which are obsolete or have very limited application. It also does not include concessions which are too complicated to legislate, either because of complexity within the concession itself or because of difficulties in fitting various strands of the concession into the legislation in a coherent manner.

  2.  The ESCs omitted on grounds of complexity are:

    —  A4—Travelling expenses of directors and employees earning £8,500 a year or more.

    —  A10—Lump sums from overseas pension schemes.

    —  A37—Tax treatment of directors' fees received by partnerships and other companies.

    —  A61—Clergymen's heating and lighting, etc expenses.

    —  A68—Payments out of a discretionary trust which are emoluments taxable under Schedule E.

    —  A81—Termination payments and legal costs.

  3.  The ESCs omitted because they are obsolescent or of very limited application are:

    —  A44—Education allowances under Overseas Service Aid Scheme.

    —  A49—Widow's pension paid to widow of Singapore nationality, resident in the United Kingdom, whose husband was a United Kingdom national employed as a Public Officer by the Government of Singapore.

    —  A60—Agricultural workers' board and lodging.

  4.  Other ESCs omitted are:

    —  A40—Adoption allowances payable under The Adoption Allowance Regulations 1991 and Section 51, Adoption (Scotland) Act 1978:

      As the allowances are sometimes paid by adoption agencies (rather than by local or central government), this Bill is not the right place to rewrite the concession. The Inland Revenue view is that the allowances are chargeable to tax (if at all) as "annual payments", under Schedule D Case III. So the better place for the exemption seems to be the Exempt Income Part of next rewrite Bill.

    —  A55—Arrears of foreign pension:

      This cannot be rewritten until the main Schedule D Case V rules are rewritten. This will be done in the next rewrite Bill.

    —  A56—Benefits in kind: the tax treatment of accommodation in Scotland provided for employees.

    —  A91(b)—Living accommodation provided by reason of employment.

  These concessions both hang from the Inland Revenue practice of taking the gross rateable value of provided living accommodation as a proxy for the annual value in computing the cash equivalent of the benefit of that accommodation. Since the General Rate Act 1967 was repealed in 1988, the concept of gross rateable value does not have any statutory definition and so is a term that cannot be incorporated in this Bill.


 
previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2003
Prepared 10 February 2003