Select Committee on Delegated Powers and Deregulation Twelfth Report


TAX CREDITS BILL

Memorandum by Inland Revenue

1.  This memorandum identifies provisions for delegated legislation in the Tax Credits Bill. Its object is to explain the purpose of the delegated legislation, why the matter is being left to delegated legislation, and the procedure selected for each power.

Outline of the Bill

2.  The Tax Credits Bill provides for the introduction of Working Families' Tax Credit and Disabled Person's Tax Credit. These tax credits will build on and replace the existing benefits - Family Credit and Disability Working Allowance. They will be introduced from 5 October 1999 and initially will be paid directly by the Inland Revenue. The Bill also provides that for employees, from 6 April 2000, the credits will where appropriate, be paid through the pay packet. The self employed will continue to receive their tax credits direct from the Inland Revenue, and couples will be able to choose which partner receives the tax credit, so it could be paid direct to the non-working partner.

3.  In addition to the main provisions for introduction and payment via employers, the Bill also provides for:

  • protection of employees rights not to suffer dismissal or other detriment;
  • penalties to combat fraud and negligence both in claiming tax credits and in administering payment through pay packets;
  • appeals on WFTC and DPTC claims to be heard by the new unified appeal tribunals established under the Social Security Act 1998;
  • necessary exchanges of information between Inland Revenue and Department of Social Security;
  • WFTC and DPTC to be excepted matters for Northern Ireland.

4.  It may be helpful to explain at this point the main features of the structure of the legislation itself which will show the origins of the majority of the delegated powers.

5.  The tax credits build on and replace FC and DWA. In order to do this in the most efficient way, the legislation to introduce the tax credits builds directly on the existing social security legislation for the benefits. The greater part of the Bill therefore consists of amendments to the Social Security Contributions and Benefits Act 1992, and the Social Security Administration Act 1992. The changes to these Acts effectively convert the benefits into tax credits, and transfer the functions relating to them to the Treasury and the Board of Inland Revenue.

6.  The Bill also amends the Taxes Management Act 1970 to ensure that the tax credits are included in the matters the Board is responsible for.

Details of the delegated powers by clause

CLAUSE 2 AND SCHEDULE 2

7.  This clause and schedule contain the main transfer provisions in the Bill. The clause divides the functions to be transferred into those being transferred to the Treasury, those going to the Board and those to Officers of the Board. The functions concerned are detailed in the schedule, and are all the functions, or delegated powers which currently apply for Family Credit and Disability Working Allowance. These are contained in the Social Security Contributions and Benefits Act 1992 (CBA), Social Security Administration Act 1992 (SSAA), and the Social Security Act 1998 (SSA). There are also similar provisions in corresponding legislation for Northern Ireland. The powers are therefore not newly created ones, but are already in existence and simply being transferred to another authority.

8.  Subsection (1)(a) and Schedule 2 Part I provide for certain specified functions to transfer to the Treasury. Broadly speaking, these are functions which affect the level of WFTC or DPTC which will be paid. Therefore it is appropriate for them to rest with the Treasury. The division lies between regulation making powers relating to the level of tax, or in this case tax credits, which are exercised by the Treasury Commissioners, and those relating to administration of the tax system, or the tax credits, which are exercised by the Board of Inland Revenue. The powers are detailed in the Schedule.

SCHEDULE 2

9.  Paragraph 1(a) enables the current provision in CBA whereby the member of the couple to whom the payment of FC is paid has the payment treated as qualifying benefits for enhancing pension, to apply to WFTC. The power is to enable the member of the couple to whom the payment is made to be prescribed, and is to ensure that the correct person gains the enhancement. This is a current provision adapted for WFTC.

10.  Paragraph 2(b) provides a general regulation making power to prescribe schemes for WFTC and DPTC. This previously applied to FC and DWA as a catch-all provision. The power will be exercisable by statutory instrument made by negative resolution. The Tax Credits Bill carries through the provision in existence currently.

11.  Paragraph 1(c) contains the delegated powers (in S.128 CBA 1992) which are currently used to establish the FC scheme and transfers the powers to the Treasury. There are 8 delegated powers in S.128, which together provide the main foundation for the WFTC scheme. The powers enable:

  • the date on which a person's income and applicable amount are to be calculated to be prescribed;
  • circumstances to be prescribed whereby a person could qualify for both WFTC and DPTC;
  • a claimant to be entitled to WFTC if they are responsible for a child or person of a prescribed description;
  • the amount of the taper (where the person's income exceeds the applicable amount) to be prescribed;
  • an award to be terminated where membership of a family changes;
  • an award to be terminated if Income Support, JSA or DPTC become payable to another member of the family
  • the maximum award of WFTC to be set.

12.  These regulation making powers will help establish the WFTC scheme and the Department's view is that this is appropriate for secondary legislation as it follows the pattern set in the current legislation, and allows the flexibility to update the scheme quickly. All of the regulations will be made by negative procedure, as is the case with the benefits being replaced. Normally regulations relating to the tax system are laid only before the House of Commons, but in the case of WFTC, the Department's view was that the process should mirror that already established in social security legislation and the regulations will be laid before both Houses. In addition the Revenue will, as is their usual procedure, be publishing the regulations in draft to allow further interested parties to comment.

13.  Paragraph 1(d) contains the delegated powers (in S.129 CBA 1992) which are currently used to establish the DWA scheme. These will be used to set up the DPTC scheme, and powers transferred to the Treasury. There are 8 delegated powers in S.129 and they enable:

  • the date on which a person's income and applicable amount are to be calculated to be prescribed;
  • circumstances to be prescribed whereby a person could qualify for both WFTC and DPTC;
  • circumstances to be prescribed which put a person at a disadvantage in getting a job;
  • circumstances to be prescribed whereby a person can qualify if the only qualifying benefit is the one in s.129(2)(a)(iii);
  • the amount of the taper to be prescribed;
  • other period of the award to be prescribed;
  • regulations to provide for changes of circumstance to affect the award;
  • an award to be terminated if membership of a family changes and another award becomes payable to them;
  • the maximum award to be prescribed.

14.  These regulation making powers will set out a major part of the DPTC scheme. The Department's view is that they are appropriate for secondary legislation as this will allow the necessary flexibility to amend the scheme quickly. As for the benefit being replaced, these regulations will be made by negative procedure and again this seems appropriate as they are building on this existing legislation.

15.  Paragraph 1(e) contains 2 delegated powers from S.134 CBA. One provides for exclusion from entitlement to if the claimant's capital exceeds a prescribed amount. The other provides that entitlement of one member of a family excludes another member of the family from entitlement to the same tax credit except in prescribed circumstances. These powers will be with the Treasury, and are a mirror of the current powers insofar as they apply to FC and DWA. The regulations are to be made by negative procedure as is the case currently and the Department's view is that these are appropriate for secondary legislation to give flexibility to change the capital limit and to amend the restrictions on exclusion.

16.  Paragraph 1(f) contains 2 delegated powers from S.135 CBA. One is to prescribe the applicable amount, and the other is to prescribe nil as the applicable amount. The applicable amount is the amount of income above which the applicant is not entitled to the maximum award. The Department's view is that these are appropriate for secondary legislation as it will allow the amounts to be changed quickly.

17.  Paragraph 1(g) contains 7 delegated powers from S.136 CBA to enable:

  • income and capital of claimants' family to be treated as that of claimant, except in prescribed circumstances;
  • capital not exceeding a prescribed amount but exceeding a lower amount to be treated as income of a prescribed amount;
  • income and capital to be calculated in a prescribed manner;
  • income to be calculated in respect of a week;
  • circumstances to be prescribed whereby a person is treated as possessing income or capital he does not possess;
  • circumstances to be prescribed whereby income or capital can be disregarded;
  • circumstances to be prescribed whereby income is treated as capital, or capital is treated as income.

18.  All of these powers are already in existence to regulate the current FC and DWA schemes (and indeed the wider benefit system). The regulations will be made by negative procedure as is currently the case. The Department's view is that this is appropriate for secondary legislation as it enables changes to be made to the scheme quickly insofar as low income and capital are calculated, without having to use primary legislation.

19.  Paragraph 2 contains power to make an order for up-rating of WFTC and DPTC from S.150 in SSAA 1992. This is the provision and power currently applying to the benefit system. The regulations are to be made by affirmative resolution as is the case currently. The Department's view is that this is appropriate for secondary legislation as it allows annual up-rating to take place promptly in reaction to price changes, without needing to use primary legislation.

20.  Paragraphs 3 and 4 mirror the provisions in Paragraphs 1 and 2 for the corresponding Northern Inland provisions.

21.  Sub-section (1)(c) and Schedule 2 Part III provides for functions to transfer to the Board of Inland Revenue. Broadly speaking, these are functions and regulation making powers which relate to the administration of the tax credits. As the Board have statutory responsibility for the administration of the tax system generally, it is therefore appropriate for them to make the regulations for administration of the tax credits. In the tax system, anything which is procedural or administrative tends to fall within secondary rather than primary legislation.

22.  Paragraph 7(a) provides for the transfer of powers in the Social Security Contributions and Benefits Act 1992, not mentioned in Part I of the Schedule. The delegated powers will enable:

  • circumstances to be prescribed in which a person is put at a disadvantage in getting a job (from S.129(3));
  • circumstances to be prescribed whereby a person may qualify for DPTC if the only qualifying benefit is one referred to in S.129(2)(a);
  • prescribing of a minimum amount of an award, below which it will not be paid (S.134(4)).

23.  Section 137 of the Contributions and Benefits Act contains a number of delegated powers, and these will apply to WFTC/DPTC as they have applied for FC/DWA. The powers will enable:

  • circumstances to be prescribed whereby a person is to be treated as being or not being in Great Britain;
  • regulations to allow for continuation of entitlement during temporary absences from Great Britain;
  • prescribing what is or is not to be treated as remunerative work;
  • circumstances to be prescribed whereby a person is to be treated or not treated as engaged in remunerative work;
  • prescribing what is or is not to be treated as relevant education;
  • circumstances to be prescribed whereby a person is treated or not treated as receiving relevant education;
  • specification of descriptions of pension increases under war pensions or industrial injury schemes which are analogous to qualifying benefits for DPTC;
  • regulations specifying that a person who is liable to make payments in respect of a dwelling is not so liable, and vice versa;
  • circumstances to be prescribed whereby persons are treated or not treated as members of a household;
  • circumstances to be prescribed whereby one person is treated as responsible for another.

24.  All of these regulation making powers are currently in Social Security legislation and the Bill merely transfers the powers to make the regulations insofar as they affect WFTC and DPTC. Paragraph 7(a) also transfers the general provision in CBA 1992 for regulation making and replicates for WFTC and DPTC. The regulations are to be made by negative resolution before both Houses. Again, the Department's view is that this is appropriate for secondary legislation in giving the ability to adapt to provide for different circumstances as they arise without having to use primary legislation. The process is the usual one for these provisions, and appropriate for the tax credits. Again procedural and administrative matters in the tax system are normally dealt with in secondary legislation.

25.  Paragraph 7(b) provides for the transfer of powers in the Social Security Administration Act 1992, not mentioned in Part 1 of Schedule 2. The powers will transfer to the Board. The delegated powers transferred from S1 of the Act will enable:

  • cases to be prescribed where there can be entitlement to WFTC although a claim has not been in the prescribed manner;
  • circumstances to be prescribed whereby a claim may still be valid without a national insurance number being included.

26.  There are a number of delegated powers in Section 5 of the Administration Act. Insofar as they currently apply for FC and DWA, they will transfer as powers applying to WFTC and DPTC. As with the other delegated powers, the tax credits legislation simply steps in the shoes of the benefits being replaced. The delegated powers in Section 5 will enable:

  • provision made to require a claim to be made by the person, within the time and manner prescribed.
  • claims to be treated as made of an earlier of a later date
  • claims to be made or treated as made for a period after they are made
  • awards to be made subject to the claimant fulfilling the conditions of entitlement
  • awards to be reviewed if conditions of entitlement are not satisfied
  • disallowance of a claim to be treated as disallowance of a further claim until the grounds for the disallowance cease
  • one person to be allowed to act for another on a claim
  • provisions to require information or evidence needed for determining a claim to be provided by a prescribed person
  • provision to be made to prescribe the person to whom, time when, and manner in which benefit is to be paid, and for information and evidence to be furnished in connection with payment
  • provision to be made to require notice to be given of any change in circumstances affecting entitlement or payment of the benefit
  • the day on which a benefit period is to begin or end to be prescribed
  • calculation of the amounts of the award using a prescribed scale and adjusting to avoid fractions
  • an award to be extinguished if it is not obtained within 12 months
  • an award to be withheld, and subsequently paid
  • circumstances to be prescribed for benefits to be paid to another person on behalf of a claimant, to discharge an obligation by the claimant
  • payment to be made to persons claiming to be entitled on the death of a claimant
  • payments on account to be made in particular circumstances (where not claim has been made it is impracticable for it to be made immediately; where a claim has been made and it, or an appeal, cannot be determined immediately, or where an award has been made but it cannot be paid immediately).

27.  These provisions are suitable for secondary legislation as they would enable the Board to make changes to the claims provisions very quickly if circumstances alter, rather than waiting for primary legislation to be made. Such administrative matters are normally included in secondary rather than primary legislation within tax legislation. The regulations here will be by negative procedure, which follows the pattern currently for these powers, and for regulations within the tax system.

28.  Section 150 of the Administration Act provides for the annual uprating of benefits, and the provisions will apply to WFTC and DPTC. The section will require the Treasury to review the level of WFTC and DPTC and lay an up-rating order if necessary. These regulations will be made by affirmative resolution of both Houses. The provision is suitable for secondary legislation as it enables a quick reaction to be made to price changes to uprate the amount of tax credit promptly.

29.  Section 189 of the Administration Act contains the general regulation making power and will apply for WFTC and DPTC.

30.  Paragraphs 7(c) and (d) of Schedule II mirror the provisions of 7(a) and (b) for the Northern Ireland legislation.

31.  Paragraph 8(a) provides for the transfer to the Board of the functions in Chapter II of Part I of the Social Security Act 1998 which are not mentioned in Part II of this Schedule. These provisions concern decision making and appeals for the tax credits, and contain a number of delegated powers. The powers transferred are following the pattern in the social security legislation, and were considered and reported on by the Committee in their 10th Report of the 1997-98 Session, published on 14 January 1998. The proposals in the Tax Credits Bill incorporate amendments made in the light of that report.

32.  Section 9 of the Social Security Act contains three delegated powers. These will enable:

  • revision of a decision within a period, under certain circumstances, and the procedure for doing this is to be prescribed
  • the date of a revision of a decision to take effect in prescribed circumstances
  • circumstances to be prescribed in which an appeal will not lapse if the decision is revised.

33.  The purpose of this section is to give maximum flexibility to put right decisions to which are incorrect for any reason and avoid claimants having to enter the appeals process unnecessarily. The regulations under this section will include matters of detail which are more appropriate for secondary legislation. The powers will give the flexibility needed to adapt to administrative needs as the new system is established. The provisions are likely to be sufficiently technical and complex to be appropriate to secondary legislation.

34.  Section 10 of the Social Security Act 1998 contains two delegated powers, which will enable:

  • a decision to be superseded under certain cases and circumstances and procedure
  • date of a decision to be prescribed.

35.  We intend to use them in two main circumstances - one is when an error in the original decision has not been identified within the dispute period of one month. The other is when circumstances change and the original decision needs to be replaced by a new decision. As with the delegated powers under Section 9, these concern matters which are very detailed and more appropriate for Secondary legislation. These details are likely to be lengthy and involved and the Department's view is that they would not justify the greater use of Parliamentary time required by primary legislation. Use of secondary legislation will also allow for further cases to be catered for if the need arises, promptly.

36.  Section 11 contains a general delegated power to enable regulations to be made about decisions under former and current legislation. Its main purpose is to ensure smooth running of the system for example to deal with decisions needed under repealed legislation.

37.  Section 12 of Social Security Act 1998 sets out provisions for what may be appealed to an Appeal Tribunal, by whom, when and how. It contains four delegated powers, which will enable:

  • circumstances to be prescribed in which the section shall not confer a right of appeal
  • persons other than the claimant to be given a right of appeal
  • notice to be given of the right of appeal in such manner as may be prescribed
  • regulations to be made for the manner in which and time within which appeals are to be brought.

38.  The use of delegated powers here is deemed appropriate as it will allow for adapting to changes in business processes or information technology. It will also allow for adaptation as the new system is set up, particularly if there are difficulties in certain cases.

39.  Schedules 2 and 3 to Section 12 contains some further delegated powers. Paragraph 8 of Schedule 2 contains a regulation making power to add other decisions to the list of decisions against which there is no right of appeal. The power should give sufficient flexibility to accommodate future changes. The Department's view is that this is appropriate for secondary legislation as it will enable the legislation on decision making and appeals to keep pace as the system develops. We do not intend to use it to remove existing appeal rights. Paragraph 9 of Schedule 3 contains a power to add other decisions to the list to the list which carry a right of appeal. We intend to use this to ensure that the provisions can keep in step with the development of the tax credits.

40.  Section 14 of the Social Security Act 1998 contains delegated power in subsection (3) to prescribe other persons who have a right of appeal to a Commissioner. This will enable additional persons to be given a right of appeal and is similar to the provision in Section 12.

41.  Section 17 provides for the finality of decisions and contains one delegated power. This provides for the extent to which findings of fact or other determination embodied in a decision shall be conclusive for further decisions. Putting this matter in secondary legislation will allow it to keep up with development of improved information technology and operational innovations in the future.

42.  Section 18 provides for regulations to be made on matters arising in respect of decisions. It contains two delegated powers - one to provide for regulations with respect to matters arising whilst a decision is pending, and the other to provide for regulations to be made on matters arising out of the revision of a decision under Section 10 of an appeal of any such decision. The power in the Act in fact replaces an existing one in social security legislation which is used to allow interim decisions to be made.

43.  Section 20 enables the appeal tribunal to refer cases to a medical practitioner for examination. It contains two delegated powers - one allows for regulations to be made prescribing conditions in which an appeal tribunal are to refer a person for a medical examination. The other provides for regulations to prescribe circumstances in which an appeal tribunal may carry out a physical examination of a person, or require a person to undergo a physical test to determine his working ability.

44.  These provisions are necessary under the new Unified Appeal Tribunal system in order to continue in appropriate cases the existing practice of medical appeal tribunals who currently summon appellants in cases where an examination may be necessary to establish whether the required level of disablement is satisfied.

45.  Section 21 deals with provision for suspending payment, the subsequent making of payments, and determination of entitlement in prescribed cases or circumstances. It contains three delegated powers which will enable:

  • circumstances to be prescribed in which payments may be suspended
  • circumstances to be prescribed in which suspended payments may be subsequently made
  • circumstances to be prescribed in which an appeal against a decision that counts as pending, when the appeal has not yet been brought but the time for bringing it has not yet expired.

46.  This section gives some detail of the particular cases which would be covered by regulations to suspend the payment. These are:

  • when it appears that an issue arises although the conditions for entitlement are or were fulfilled. The intention is to cover cases where there is a question as to whether the claimant is actually entitled to the tax credit.
  • when it appears that a decision may need to be revised or superseded. This is intended to cover cases where there is a question as to whether the amount of tax credit to which the claimant is entitled may be less than that which is in payment.
  • when an appeal is pending against a decision of an appeal tribunal, a Commissioner or Court.
  • when an appeal is pending in another case and it may be that the award of tax credit in another case may need to be revised or superseded.

47.  The power to make regulations to suspend payment is aimed at guarding against unforeseen developments where suspension of payment may become necessary to prevent significant leakage of public expenditure. The regulations will contain procedural detail concerning how and when notice is to be given and we think it is appropriate for secondary legislation as this would not justify the greater use of Parliamentary time.

48.  This section also contains delegated power to prescribe circumstances in which an appeal is to be considered as pending when it has not been brought but the time limit was in which it may be brought has not yet expired. This is intended to cover situations for tax credits such as where the Board has received a decision of an appeal tribunal or a Commissioner and is considering whether there appears to be an error of law in the decision, and whether they should seek leave to appeal against the decision. This definition is a technical matter and therefore suitable for secondary legislation.

49.  Section 23 provides for regulations to be made suspending payments and subsequent terminating of entitlement where a person fails to provide information to enable the Board to determine whether a decision on award of tax credits needs to be revised or superseded. This section contains two delegated powers - one is to provide for regulations for suspending payment of a tax credit in relation to persons who fail to comply with information requirements, and the other allows for regulations to provide for the subsequent making of suspended payments in prescribed circumstances.

50.  The intention is that as a general rule payments may be suspended if the person fails to provide the information requested within one calendar month. These regulations will cover a substantial amount of administrative detail regarding the type and length of notice which the Board will give to the person regarding the information he is required to provide, the time limits in which different types of information are to be provided and the circumstances in which the Board will accept that the information could not be provided, or may be provided by a later date. This is not appropriate for primary legislation, and is also subject to change and modification in particular to address unforeseen difficulties which may arise during the practical operation of the powers. The Department therefore considers that secondary legislation is justified.

51.  Section 23 provides that entitlement shall cease from a date not earlier than the date on which payments were suspended under Section 21 and 22 except in prescribed cases and circumstances. Again these regulations will cover administrative details which are not appropriate for primary legislation and therefore the Department considers that secondary legislation is justified.

52.  Section 24 provides for regulations to be made for the suspension and termination of payment where a person has refused to submit to a medical examination. It contains 4 delegated powers to:

  • enable the Board to make regulations requiring a person to submit to a medical examination;
  • make regulations for suspension of payment where a persons fails to submit to a medical examination;
  • make regulations for subsequent making of suspended payments;
  • enable entitlement to tax credits to cease except in prescribed circumstances.

53.  The purpose of the section is to ensure that tax credits are being paid properly to those who are entitled. The powers will need to cover a number of contingencies and the use of secondary legislation will allow the Board to provide promptly for new situations as they arise.

54.  Section 25 allows for a decision to be delayed if it is dependent on another decision, because the case turns on a point of law being challenged in the other case. It contains two delegated powers

  • to prescribe cases or circumstance where a decision may be made while the lead case is pending;
  • to prescribe the cases where the decision may be made, and the basis on which it may be made.

55.  The first of these delegated powers would be used to prescribe cases such as where the amount of tax credit involved is significant, or the lead case will not be resolved for some time. The second of the delegated powers is intended for use to enable a decision to be made on the elements of the tax credit which are not at issue. The use of secondary legislation will allow the detailed procedure to be in regulations and also for prompt amendments to be made as the system develops.

56.  Section 26 provides for procedures for dealing with appeals which turn on an issue of law which is being challenged in another case. It contains two delegated powers - one allows for regulations to prescribe circumstances in which an appeal against a decision counts as pending, when an appeal has not yet been brought but the time limit for bringing it has not expired. The other provides for regulations for supplementary provisions concerning these appeals. The use of secondary legislation will allow for changes to be made promptly as this new type of provision is put into practice.

57.  Section 28 provides for regulations to be made to define circumstances in which accidental errors and decisions may be corrected. It contains two delegated powers - one is to enable the correction to be made and the other is to provides for setting aside a decision in appropriate cases. These regulations will therefore need to contain minor administrative detail which is appropriate for secondary legislation.

58.  The delegated powers in the Social Security Act 1998 will be made by affirmative and negative resolution. The powers which will be exercised by affirmative resolution, affecting the tax credits are, are those in section 12(2), and paragraph 9 of Schedule 2.

CLAUSE 3

59.  Clause 3 provides for the transfer of property rights and liabilities relating to the functions being transferred to the Treasury and the Board and its primary purpose is to allow for the transfer of contracts. It contains one delegated power providing for a statutory instrument to be made continuing the Order in Council for the transfer of staff currently employed in the Northern Ireland Civil Service to the Home Civil Service. The regulation is needed because of the separate status of the Northern Ireland Civil Service which therefore necessitates an Order in Council in order to transfer the staff to the Home Civil Service. Normally transfers between civil service departments do not require any legislation. The statutory instrument shall be made by negative resolution which seems appropriate given that this is a merely administrative measure simply because the staff belong to a different part of the civil service.

CLAUSE 6

60.  This clause gives the provisions for payment of the tax credits by employers. It contains regulation making powers relating to the making of these payments. The regulations may require employers to:

  • make payment of tax credits as notified by the Board of Inland Revenue
  • produce wage sheets and other documentation to verify payments of tax credits
  • provide employees with information relating to the tax credits paid to them
  • funding by the Board of employers, either before or after they pay the tax credit. The means by which this funding may be provided include set off against income tax or National Insurance for which the employer is accountable to the Board
  • recovery of overpayments of funding to employers
  • calculation and payment of interest on amounts due to or from the Board
  • appeals relating to matters covered in the regulations.

61.  The clause also allows that regulations made under this section may make provision for different cases and circumstances. The regulations will be made by statutory instrument which will be subject to the negative resolution procedure.

62.  These powers are intended to set out the framework of the scheme for payment by employers. It is very much on the lines of the PAYE scheme which has a similar regulation making power, with the details set out in extensive regulations. The regulations for WFTC will set out the substantial administrative detail of the scheme, which have already been consulted on with interested parties. These powers are therefore appropriate for secondary legislation and will allow for flexibility to provide for particular circumstances if changes occur, rather than have to wait for primary legislation.

CLAUSE 15

63.  This clause extends the range of childcare costs that can qualify for help through the childcare tax credit within the Working Families Tax Credit and Disabled Person's Tax Credit.

64.  The clause contains a delegated power to enable the Secretary of State to make regulations for a scheme to establish a new category of childcare provider, the cost of which will be taken into account when calculating the maximum Working Families Tax Credit and Disabled Person's Tax Credit. This is suitable for secondary legislation as it provides maximum flexibility to establish the appropriate scheme and make necessary changes quickly as it is established.

March 1999



 
previous page contents

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

© Parliamentary copyright 1999