Session 2016-17
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1

 

House of Commons

 
 

Thursday 30 June 2016

 

Public Bill Committee Proceedings

 

Finance Bill


 

[First and SEcond Sittings]


 

David Gauke

 

Agreed to

 

That—

 

(1)  

the Committee shall (in addition to its first meeting at 11.30am on Thursday

 

30 June) meet—

 

(a)  

at 2.00 pm on Thursday 30 June; 

 

(b)  

at 9.25 am and 2.00 pm on Tuesday 5 July;

 

(c)  

at 11.30 am and 2.00 pm on Thursday 7 July;

 

(d)  

at 9.25 am and 2.00 pm on Tuesday 12 July;

 

(e)  

at 11.30 am and 2.00 pm on Thursday 14 July;

 

(2)  

the proceedings shall be taken in the following order: Clauses 1 to 5,

 

Schedule 1, Clause 6, Clause 19, Schedule 4, Clauses 20 to 22, Schedule 5,

 

Clauses 23 to 39, Schedule 6, Clause 40, Clause 45, Schedule 7, Clauses 46

 

to 50, Schedule 8, Clauses 51 to 60, Schedule 9, Clauses 61 and 62, Schedule

 

10, Clauses 63 and 64, Clause 82, Schedule 15, Clauses 83 to 122, Schedule

 

16, Clauses 123 to 128, Clauses 130 and 131, Clauses 137 to 141, Schedule

 

17, Clauses 142 and 143, Clause 155, Schedule 23, Clauses 156 to 168,

 

Schedule 24, Clauses 169 to 172, Schedule 25, Clauses 173 to 179, new

 

Clauses, new Schedules, remaining proceedings on the Bill;

 

(3)  

the proceedings shall (so far as not previously concluded) be brought to a

 

conclusion at 5.00 pm on Thursday 14 July.

 


 

Mr David Gauke

 

To move, That, subject to the discretion of the Chair, any written evidence received by

 

the Committee shall be reported to the House for publication.

 

Agreed to

 



 
 

Public Bill Committee Proceedings: 30 June 2016            

2

 

Finance Bill, continued

 
 

Rob Marris

 

John McDonnell

 

Richard Burgon

 

Rebecca Long Bailey

 

Negatived on division  6

 

Clause  1,  page  1,  line  9,  at end insert—

 

“(3)    

The Chancellor of the Exchequer shall, within three months of the passing of this

 

Act, publish a report on the impact of setting the additional rate of income tax at

 

45% and at 50%.

 

(4)    

The report must estimate the impact of setting the additional rate for 2016-17 at

 

45% on the amount of income tax currently paid by someone with a taxable

 

income of—

 

(a)    

£150,000 per year;

 

(b)    

£500,000 per year; and

 

(c)    

£1,000,000 per year.

 

(5)    

The report must estimate the impact of setting the additional rate for 2016-17 at

 

50% on the amount of income tax currently paid by someone with a taxable

 

income of—

 

(a)    

£150,000 per year;

 

(b)    

£500,000 per year; and

 

(c)    

£1,000,000 per year.”

 

Clause Agreed to.

 


 

Roger Mullin

 

Withdrawn  3

 

Clause  2,  page  2,  line  4,  at end add—

 

“(3)    

The Chancellor shall assess the effect on taxation revenue of increasing the basic

 

rate limit in line with the Consumer Prices Index for 2017-18 and by no more than

 

increases in that index until 2021-22.”

 

Clause Agreed to.

 


 

Clauses 3 and 4 Agreed to.

 

Roger Mullin

 

Caroline Lucas

 

Withdrawn  4

 

Clause  5,  page  8,  line  28,  at end add—

 

“(12)    

The Chancellor of the Exchequer shall commission a review of how the changes

 

to the tax on dividend income implemented by this Act affect directors of micro-

 

business companies, to include—

 

(a)    

the impacts across the distribution of directors’ net income;

 

(b)    

whether company failure rates have been affected; and

 

(c)    

whether the law could be amended to minimise the impact on directors

 

with low income.


 
 

Public Bill Committee Proceedings: 30 June 2016            

3

 

Finance Bill, continued

 
 

(13)    

The Chancellor shall report to Parliament about his findings within six months of

 

the passing of this Act.”

 

Clause Agreed to.

 


 

Mr David Gauke

 

Agreed to  127

 

Schedule  1  ,  page  259,  line  20,  at end insert—

 

“          

In section 651 (meaning of “UK estate” and “foreign estate”)—

 

(a)    

in subsection (4), for “680(3) or (4) (sums” substitute “664(2)(c) or (d)

 

or 680(4) (sums not liable to tax and sums”, and

 

(b)    

in subsection (5), for “680(3) or (4)” substitute “664(2)(c) or (d) or

 

680(4)”.

 

            

In section 657 (tax charged on estate income from foreign estates), for “680(3)

 

or (4)”, in both places, substitute “680(4)”.

 

          

In section 663 (applicable rate for purposes of grossing-up under sections 656

 

and 657), after subsection (4) insert—

 

“(5)    

The aggregate income of the estate, so far as it consists of income

 

within section 664(2)(c) or (d), is treated for the purposes of this

 

section as bearing income tax at 0%.”

 

            

In section 670 (applicable rate for purposes of Step 2 in section 665(1)), after

 

subsection (4) insert—

 

“(4A)    

The aggregate income of the estate, so far as it consists of income

 

within section 664(2)(c) or (d), is treated for the purposes of this

 

section as bearing income tax at 0%.”

 

            

In section 680 (income of an estate that is treated as bearing income tax)—

 

(a)    

in subsection (2) omit “(3) or”, and

 

(b)    

omit subsection (3) (sums treated as bearing tax at the dividend

 

ordinary rate).

 

            

In section 680A (estate income treated as dividend income), in each of

 

subsections (1)(a) and (4)(a), after “at the dividend ordinary rate” insert “or as

 

bearing tax at 0% because of section 663(5)”.”

 

Mr David Gauke

 

Agreed to  128

 

Schedule  1  ,  page  259,  line  20,  at end insert—

 

“          

In section 854(6) (carrying on by partner of notional business: meaning of

 

“untaxed income”)—

 

(a)    

omit the “or” at the end of paragraph (b), and

 

(b)    

after paragraph (c) insert—

 

“(d)    

income chargeable under Chapter 5 of Part 4 (stock

 

dividends from UK resident companies), or

 

(e)    

income chargeable under Chapter 6 of Part 4 (release

 

of loan to participator in closed company).””


 
 

Public Bill Committee Proceedings: 30 June 2016            

4

 

Finance Bill, continued

 
 

Mr David Gauke

 

Agreed to  129

 

Schedule  1  ,  page  265,  line  31,  at end insert—

 

“( )    

in paragraph (b), for “680(3)(b) or (4)” substitute “680(4)”, and”

 

Mr David Gauke

 

Agreed to  130

 

Schedule  1  ,  page  265,  line  39,  at end insert—

 

    “( )  

In section 498 (discretionary payments by trustees: types of tax to be included

 

in trustees’ tax pool)—

 

(a)    

in subsection (1)—

 

(i)    

in Type 1 (tax at special rates for trustees on income not

 

attracting tax credits), omit “2, 3 or”, and

 

(ii)    

omit Types 2 and 3 (tax at dividend trust rate on income

 

attracting dividend tax credits), and

 

(b)    

omit subsection (2) (interpretation of Types 2 and 3).”

 

Mr David Gauke

 

Agreed to  131

 

Schedule  1  ,  page  269,  line  8,  at end insert—

 

“( )    

the amendments in section 854(6) of ITTOIA 2005,”

 

Mr David Gauke

 

Agreed to  132

 

Schedule  1  ,  page  269,  line  9,  leave out “sections 425,” and insert “section 425

 

except the amendment in section 425(5)(b), and the amendments in sections 498,”

 

Mr David Gauke

 

Agreed to  133

 

Schedule  1  ,  page  269,  line  33,  at end insert—

 

    “( )  

The amendments in sections 651 to 680A of ITTOIA 2005 (but not the repeal

 

of section 680(3)(a) of that Act) and the amendment in section 425(5)(b) of

 

ITA 2007—

 

(a)    

so far as they relate to income within section 664(2)(c) of ITTOIA

 

2005 (stock dividends), have effect in relation to stock dividend

 

income treated as arising in the tax year 2016-17 or at any later time,

 

and

 

(b)    

so far as they relate to income within section 664(2)(d) of ITTOIA

 

2005 (release of loans), have effect in relation to amounts released or

 

written off in the tax year 2016-17 or at any later time.”

 

Schedule, as amended, Agreed to.

 


 

Clauses 6 and 19, Schedule 4 and Clauses 20 to 22 agreed to.


 
 

Public Bill Committee Proceedings: 30 June 2016            

5

 

Finance Bill, continued

 
 

Mr David Gauke

 

Agreed to  134

 

Schedule  5,  page  299,  line  9,  after “immediately”, insert “after”

 

Schedule, as amended, Agreed to.

 


 

Clauses 23 to 27 Agreed to.

 

Rob Marris

 

John McDonnell

 

Richard Burgon

 

Rebecca Long Bailey

 

Withdrawn  135

 

Clause  28,  page  2,  line  42,  at end add—

 

“(7)    

The Chancellor of the Exchequer shall, within one year of the passing of this Act,

 

publish a report giving the Treasury’s assessment of the effect of excluding

 

energy generation from EIS/SEIS/VCT schemes on—

 

(a)    

the renewable energy sector,

 

(b)    

community energy projects, and

 

(c)    

the energy sector”.

 

Clause Agreed to.

 

Clauses 29 to 34 Agreed to.

 


 

Rob Marris

 

John McDonnell

 

Richard Burgon

 

Rebecca Long Bailey

 

Not moved  7

 

Clause  35,  page  57,  line  2,  at end add—

 

“(4)    

The Chancellor of the Exchequer shall, within one year of the passing of this Act,

 

publish a report on the impact of this section on deterring tax avoidance during

 

the procedure of distributions during a winding up.”

 

Clause Agreed to.

 


 

Clause 36 Agreed to.


 
 

Public Bill Committee Proceedings: 30 June 2016            

6

 

Finance Bill, continued

 
 

Rob Marris

 

John McDonnell

 

Richard Burgon

 

Rebecca Long Bailey

 

Not called  8

 

Clause  37,  page  58,  line  26,  leave out from “is” to end of subsection and insert

 

“100%”

 

Mr David Gauke

 

Agreed to  43

 

Clause  37,  page  67,  line  45,  leave out “value” and insert “amount”

 

Mr David Gauke

 

Agreed to  44

 

Clause  37,  page  68,  line  41,  leave out “company” and insert “underlying scheme”

 

Mr David Gauke

 

Agreed to  45

 

Clause  37,  page  68,  line  43,  leave out “a company” and insert “an underlying

 

scheme”

 

Mr David Gauke

 

Agreed to  46

 

Clause  37,  page  68,  line  47,  leave out “value” and insert “amount”

 

Mr David Gauke

 

Agreed to  47

 

Clause  37,  page  70,  line  15,  leave out “company” and insert “underlying scheme”

 

Mr David Gauke

 

Agreed to  48

 

Clause  37,  page  70,  line  21,  leave out “value” and insert “amount”

 

Mr David Gauke

 

Agreed to  49

 

Clause  37,  page  70,  line  34,  at end insert “, or the acquisition of portfolios of

 

investments from,”

 

Clause, as amended, Agreed to.

 


 

Clauses 38 and 39 and Schedule 6 agreed to.


 
 

Public Bill Committee Proceedings: 30 June 2016            

7

 

Finance Bill, continued

 
 

Mr David Gauke

 

Agreed to  20

 

Clause  40,  page  80,  leave out lines 33 to 39 and insert——

 

““intellectual property royalty payment” means a payment referred to in

 

section 906(2)(a) or (3)(a);”.

 

Mr David Gauke

 

Agreed to  21

 

Clause  40,  page  81,  line  12,  at end insert—

 

“(3)    

In relation to payments made (under any such arrangements) on or after 17 March

 

2016 and on or before the day on which this Act is passed, section 917A of ITA

 

2007 as inserted by subsection (1) has effect as if the definition of “intellectual

 

property royalty payment” in that section were as follows—

 

““intellectual property royalty payment” means—

 

(a)    

a payment of a royalty or other sum in respect of the use of a

 

patent,

 

(b)    

a payment specified in section 906(1)(a) (as originally enacted),

 

or

 

(c)    

a payment which is a “qualifying annual payment” for the

 

purposes of Chapter 6 by virtue of section 899(3)(a)(ii) (royalties

 

etc from intellectual property);”.

 

(4)    

In relation to payments made (under any such arrangements) on or after 28 June

 

2016 and on or before the day on which this Act is passed, section 917A of ITA

 

2007 as inserted by subsection (1) has effect as if “intellectual property royalty

 

payment” also included (so far as it would not otherwise do so) any payments

 

referred to in section 906(2)(a) or (3)(a) of ITA 2007 as substituted by section

 

(deduction of income tax at source: intellectual property).”

 

Clause Agreed to.

 


 

Clause 45 Agreed to.

 

Rob Marris

 

John McDonnell

 

Richard Burgon

 

Rebecca Long Bailey

 

Not called  9

 

Schedule  7,  page  305,  line  3,  leave out “the preceding provisions of this section”

 

and insert “Part 4 of TIOPA 2010”

 

Rob Marris

 

John McDonnell

 

Richard Burgon

 

Rebecca Long Bailey

 

Not called  10

 

Schedule  7,  page  305,  line  9,  leave out “the preceding provisions of this section”

 

and insert “Part 4 of TIOPA 2010”


 
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Revised 30 June 2016