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679

 

SUPPLEMENT TO THE VOTES AND PROCEEDINGS

 
 

Tuesday 28 June 2011

 

Report Stage Proceedings

 

Finance (No. 3) Bill, As Amended


 

[First Day]


 

New Clauses

 

Medical insurance (pensioner tax relief)

 

Sir Paul Beresford

 

Mr Christopher Chope

 

Oliver Heald

 

Withdrawn  NC1

 

To move the following Clause:—

 

‘(1)    

This section applies where—

 

(a)    

on or after 6 April 2012 an individual makes a payment in respect of a

 

premium under a contract of private medical insurance (whenever

 

issued),

 

(b)    

the contract meets the requirement in subsection (2) below as to the

 

person or persons insured,

 

(c)    

at the time the payment is made the contract is an eligible contract,

 

(d)    

the individual making the payment does not make it out of resources

 

provided by another person for the purpose of enabling it to be made, and

 

(e)    

the individual making the payment is not entitled to claim any relief or

 

deduction in respect of it under any other provision of the Tax Acts.

 

(2)    

The requirement mentioned in subsection (1)(b) above is that the contract

 

insures—

 

(a)    

an individual who at the time the payment is made is aged 65 or over and

 

resident in the United Kingdom,

 

(b)    

individuals each of whom at that time is aged 65 or over and resident in

 

the United Kingdom, or

 

(c)    

two individuals who are married to each other at that time, at least one of

 

whom is aged 65 or over at that time, and each of whom is resident in the

 

United Kingdom at that time.

 

(3)    

If the payment is made by an individual who at the time it is made is resident in

 

the United Kingdom (whether or not he is the individual or one of the individuals

 

insured by the contract) it shall be deducted from or set off against his income for

 

the year of assessment in which it is made; but relief under this subsection shall

 

be given only on a claim made for the purpose, except where subsections (4) to

 

(6) below apply.


 
 

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Finance (No. 3) Bill, continued

 
 

(4)    

In such cases and subject to such conditions as the Commissioners of Her

 

Majesty’s Revenue and Customs (“the Commissioners”) may specify in

 

regulations, relief under subsection (3) above shall be given in accordance with

 

subsections (5) and (6) below.

 

(5)    

An individual who is entitled to such relief in respect of a payment may deduct

 

and retain out of it an amount equal to income tax on it at the basic rate for the

 

year of assessment in which it is made.

 

(6)    

The person to whom the payment is made—

 

(a)    

shall accept the amount paid after deduction in discharge of the

 

individual’s liability to the same extent as if the deduction had not been

 

made, and

 

(b)    

may, on making a claim, recover from the Commissioners an amount

 

equal to the amount deducted.

 

(7)    

The Treasury may make regulations providing that in circumstances prescribed

 

in the regulations—

 

(a)    

an individual who has made a payment in respect of a premium under a

 

contract of private medical insurance shall cease to be and be treated as

 

not having been entitled to relief under subsection (3) above; and

 

(b)    

he or the person to whom the payment was made (depending on the terms

 

of the regulations) shall account to the Commissioners for tax from which

 

relief has been given on the basis that the individual was so entitled.

 

(8)    

Regulations under subsection (7) above may include provision adapting or

 

modifying the effect of any enactment relating to income tax in order to secure

 

the performance of any obligation imposed under paragraph (b) of that

 

subsection.

 

(9)    

In this section references to a premium, in relation to a contract of insurance, are

 

to any amount payable under the contract to the insurer.’.

 


 

Eligible medical insurance contracts

 

Sir Paul Beresford

 

Mr Christopher Chope

 

Oliver Heald

 

Not called  NC2

 

To move the following Clause:—

 

‘(1)    

This section has effect to determine whether a contract is at a particular time (the

 

relevant time) an eligible contract for the purposes of section [Medical insurance

 

(pensioner tax relief)].

 

(2)    

A contract is an eligible contract at the relevant time if—

 

(a)    

it was entered into by an insurer who at the time it was entered into was

 

a qualifying insurer and was approved by the Commissioners for the

 

purposes of this section,

 

(b)    

the period of insurance under the contract does not exceed one year

 

(commencing with the date it was entered into),

 

(c)    

the contract is not connected with any other contract at the relevant time

 

and has not been connected with any other contract at any time since it

 

was entered into,

 

(d)    

no benefit has been provided by virtue of the contract other than an

 

approved benefit, and


 
 

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Finance (No. 3) Bill, continued

 
 

(e)    

the contract meets one or more of the three conditions set out below.

 

(3)    

The first condition is that the contract is certified by the Commissioners under

 

section [Certification of contracts] at the relevant time.

 

(4)    

The second condition is that, at the time the contract was entered into, it

 

conformed with a standard form certified by the Commissioners as a standard

 

form of eligible contract.

 

(5)    

The third condition is that, at the time the contract was entered into, it conformed

 

with a form varying from a standard form so certified in no other respect than by

 

making additions—

 

(a)    

which were (at the time the contract was entered into) certified by the

 

Commissioners as compatible with an eligible contract when made to

 

standard form, and

 

(b)    

which (at that time) satisfied any conditions subject to which the

 

additions were so certified.

 

(6)    

Where a contract is varied, and the relevant time falls after the time the variation

 

takes effect, subsections (1) to (5) above shall have effect as if “entered into” read

 

“varied” in each place where it occurs in subsections (4) and (5) above.

 

(7)    

For the purposes of this section a contract is connected with another contract at

 

any time if—

 

(a)    

they are simultaneously in force at that time,

 

(b)    

either of them was entered into with reference to the other, or with a view

 

to enabling the other to be entered into on particular terms, or with a view

 

to facilitating the other being entered into on particular terms, and

 

(c)    

the terms on which either of them was entered into would have been

 

significantly less favourable to the insured if the other had not been

 

entered into.

 

(8)    

For the purposes of this section each of the following is a qualifying insurer—

 

(a)    

an insurer lawfully carrying on in the United Kingdom business relating

 

to insurance;

 

(b)    

an insurer not carrying on business in the United Kingdom but carrying

 

on business in another member State and being either a national of a

 

member State or a company or partnership formed under the law of any

 

part of the United Kingdom or another member State and having its

 

registered office, central administration or principal place of business in

 

a member State.

 

(9)    

For the purposes of this section a benefit is an approved benefit if it is provided

 

in pursuance of a right of a description mentioned in section [Certification of

 

contracts] (3)(a).’.

 


 

Certification of contracts

 

Sir Paul Beresford

 

Mr Christopher Chope

 

Oliver Heald

 

Not called  NC3

 

To move the following Clause:—

 

‘(1)    

The Commissioners shall certify a contract under this section if it satisfies the

 

conditions set out in subsection (3) below; and the certification shall be expressed


 
 

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Finance (No. 3) Bill, continued

 
 

to take effect from the time the conditions are satisfied, and shall take effect

 

accordingly.

 

(2)    

The Commissioners shall revoke a certification of a contract under this section if

 

it comes to their notice that the contract has ceased to satisfy the conditions set

 

out in subsection (3) below; and the revocation shall be expressed to take effect

 

from the time the conditions ceased to be satisfied, and shall take effect

 

accordingly.

 

(3)    

The conditions referred to above are that—

 

(a)    

the contract either provides indemnity in respect of all or any of the costs

 

of all or any of the treatments, medical services and other matters for the

 

time being specified in regulations made by the Treasury, or in addition

 

to providing indemnity of that description provides cash benefits falling

 

within rules for the time being so specified,

 

(b)    

the contract does not confer any right other than such a right as is

 

mentioned in paragraph (a) above or is for the time being specified in

 

regulations made by the Treasury,

 

(c)    

the premium under the contract is in the Commissioners’ opinion

 

reasonable, and

 

(d)    

the contract satisfies such other requirements as are for the time being

 

specified in regulations made by the Treasury.

 

(4)    

The certification of a contract by the Commissioners under this section shall

 

cease to have effect if the contract is varied; but this is without prejudice to the

 

application of the preceding provisions of this section to the contract as varied.

 

(5)    

Where the Commissioners refuse to certify a contract under this section, or they

 

revoke a certification, an appeal may be made to the relevant Tribunal by—

 

(a)    

the insurer, or

 

(b)    

any person who (if the policy were certified) would be entitled to relief

 

under section 1 above.

 

(6)    

Where a contract is certified under this section, or a certification is revoked or

 

otherwise ceases to have effect, any adjustments resulting from the certification

 

or from its revocation or ceasing to have effect shall be made.

 

(7)    

Subsection (6) above applies where a certification or revocation takes place on

 

appeal as it applies in the case of any other certification or revocation.

 

(8)    

In this section the reference to a premium, in relation to a contract of insurance,

 

is to any amount payable under the contract to the insurer.’.

 


 

Medical insurance: supplementary

 

Sir Paul Beresford

 

Mr Christopher Chope

 

Oliver Heald

 

Not called  NC4

 

To move the following Clause:—

 

‘(1)    

The Commissioners may by regulations—

 

(a)    

provide that a claim under section [Medical insurance (pensioner tax

 

relief)] (3) or (6)(b) shall be made in such form and manner, shall be

 

made at such time, and shall be accompanied by such documents, as may

 

be prescribed;


 
 

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Finance (No. 3) Bill, continued

 
 

(b)    

make provision, in relation to payments in respect of which a person is

 

entitled to relief under section [Medical insurance (pensioner tax relief)],

 

for the giving by insurers in such circumstances as may be prescribed of

 

certificates of payment in such form as may be prescribed to such persons

 

as may be prescribed;

 

(c)    

provide that a person who provides (or has at any time provided)

 

insurance under contracts of private medical insurance shall comply with

 

any notice which is served on him by the Commissioners and which

 

requires him within a prescribed period to make available for the

 

Commissioners inspection documents (of a prescribed kind) relating to

 

such contracts;

 

(d)    

provide that persons of such a description as may be prescribed shall,

 

within a prescribed period of being required to do so by the

 

Commissioners, furnish to the Commissioners information (of a

 

prescribed kind) about contracts of private medical insurance;

 

(e)    

make provision with respect to the approval of insurers for the purposes

 

of section [Eligible medical insurance contracts] and the withdrawal of

 

approval for the purposes of that section;

 

(f)    

make provision for and with respect to appeals against decisions of the

 

Commissioners with respect to the giving or withdrawal of approval of

 

insurers for the purposes of section [Eligible medical insurance

 

contracts];

 

(g)    

make provision with resepect to the certification by the Commissioners

 

of standard forms of eligible contract and variations from standard forms

 

of eligible contract certified by them;

 

(h)    

make provision for and with respect to appeals against decisions of the

 

Commissioners with respect to the certification of standard forms of

 

eligible contract or variations from standard forms of eligible contract

 

certified by them;

 

(i)    

provide that certification, or the revocation of a certification, under

 

section [Certification of contracts] shall be carried out in such form and

 

manner as may be prescribed;

 

(j)    

make provision with respect to appeals against decisions of the

 

Commissioners with respect to certification or the revocation of

 

certification under section [Certification of contracts];

 

(k)    

make provision generally as to administration in connection with

 

sections [Medical insurance (pensioner tax relief)] to [Certification of

 

contracts].

 

(2)    

In subsection (1) above—

 

“eligible contract” has the meaning given by section [Eligible medical

 

insurance contracts], and

 

“prescribed” means prescribed by or, in relation to form, under the

 

regulations.’.

 



 
 

Report Stage Proceedings: 28 June 2011                  

684

 

Finance (No. 3) Bill, continued

 
 

Transfer of personal allowances between spouses

 

Fiona Bruce

 

John Glen

 

Mr David Amess

 

Mr Gary Streeter

 

Craig Whittaker

 

Priti Patel

 

Negatived on division  NC5

 

To move the following Clause:—

 

‘After section 37 of the Income Tax Act 2007, insert—

 

“37A  

Transfer of personal allowances between spouses

 

(1)    

This section applies to an individual who is entitled to a personal

 

allowance under sections 35 to 37 for a tax year if—

 

(a)    

the individual is a person whose spouse who is living with the

 

individual for the whole or any part of the tax year, and

 

(b)    

the spouse meets the requirements of section 56 (residence, etc).

 

(2)    

If—

 

(a)    

the allowance exceeds the individual’s remaining relievable

 

income;

 

(b)    

the individual makes an election, and

 

(c)    

the individual’s spouse makes a claim,

 

    

the individual’s spouse is entitled to an allowance for the tax year equal

 

to the amount of the excess.

 

(3)    

The individual’s remaining relievable income is found by—

 

(a)    

taking the amount of the individual’s net income, and

 

(b)    

subtracting any personal allowance to which the individual is

 

entitled for the tax year.”’.

 


 

Rate of value added tax

 

Jonathan Edwards

 

Withdrawn  NC6

 

To move the following Clause:—

 

‘(1)    

In section 2(1) of the Value Added Tax Act 1994 (rate of VAT), for “20 per cent”

 

substitute “17.5 per cent”.

 

(2)    

In section 21(4) of that Act (restriction on value of imported goods), for “25 per

 

cent” substitute “28.58 per cent”.

 

(3)    

The amendment made by subsections (1) and (2) has effect in relation to any

 

supply made on or after 30 August 2011 and any acquisition or importation taking

 

place on or after that date.’.

 



 
 

Report Stage Proceedings: 28 June 2011                  

685

 

Finance (No. 3) Bill, continued

 
 

Transfer of powers over other taxes to Welsh Ministers

 

Jonathan Edwards

 

Not selected  NC7

 

To move the following Clause:—

 

‘(1)    

The Chancellor of the Exchequer shall make regulations to transfer to Welsh

 

Ministers powers relating to setting other taxes and environmental taxes in Wales.

 

(2)    

“Other taxes and environmental taxes” shall include, but is not exclusive to—

 

(a)    

landfill tax,

 

(b)    

stamp duty land tax,

 

(c)    

aggregates levy, and

 

(d)    

air passenger duty.

 

(3)    

Regulations made under subsection (1) must be laid within 12 months of the

 

passing of this Act and shall be subject to annulment in pursuance of a resolution

 

of either House of Parliament.’.

 


 

Transfer of Corporation Tax powers to Welsh Ministers

 

Jonathan Edwards

 

Not selected  NC8

 

To move the following Clause:—

 

‘(1)    

The Chancellor of the Exchequer shall make regulations to transfer to Welsh

 

Ministers powers relating to setting corporation tax in Wales.

 

(2)    

Regulations made under subsection (1) must be laid within 12 months of the

 

passing of this Act and shall be subject to annulment in pursuance of a resolution

 

of either House of Parliament.’.

 


 

Value Added Tax (Change of Rate) Order 2011

 

Jonathan Edwards

 

Negatived on division  NC9

 

To move the following Clause:—

 

‘(1)    

The Chancellor of the Exchequer shall make an order under the powers conferred

 

by sections 2(2) and 21(7) of the Value Added Tax Act 1994 that in section 2(1)

 

of the Value Added Tax Act 1994 (rate of VAT), the rate of tax charged by virtue

 

of that section shall be decreased by 12.5 per cent.

 

(2)    

In section 21(4) (value of imported goods) of the Value Added Tax Act 1994 for

 

“25” substitute “28.58”.

 

(3)    

This Order shall be known as The Value Added Tax (Change of Rate) Order 2011

 

and shall come into force on 30 August 2011.’.

 



 
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