Session 2016-17
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1

 

SUPPLEMENT TO THE VOTES AND PROCEEDINGS

 
 

Monday 5 September 2016

 

Report Stage Proceedings

 

Finance Bill, as amended


 

[First Day]


 

NEW CLAUSES, NEW SCHEDULES AND AMENDMENTS TO CLAUSES AND SCHEDULES

 

RELATING TO CORPORATION TAX

 

Roger Mullin

 

Kirsty Blackman

 

Philip Boswell

 

Negatived on division  NC5

 

To move the following Clause—

 

         

“Corporation tax treatment of the oil and gas industry

 

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

 

Act, commission a comprehensive review of the corporation tax rates and

 

investment allowances applicable to companies producing oil and gas in the UK

 

or on the UK continental shelf, and publish the report of the review.”

 


 

John McDonnell

 

Rebecca Long Bailey

 

Peter Dowd

 

Not called  NC10

 

To move the following Clause—

 

         

“Review of the operation of the Patent Box

 

(1)    

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

 

Act, lay an independent report of the value for money provided by, and the

 

efficacy of, the Patent Box legislation before both Houses of Parliament.

 

(2)    

The report shall—

 

(a)    

assess the size and nature of the companies taking advantage of the Patent

 

Box legislation;

 

(b)    

assess the impact of the Patent Box legislation on research and innovation

 

in the UK, including supporting evidence; and


 
 

Report Stage Proceedings: 5 September 2016              

2

 

Finance Bill, as amended, continued

 
 

(c)    

assess the cost effectiveness of the Patent Box legislation in incentivising

 

research and development compared to other policy options.”

 


 

John McDonnell

 

Rebecca Long Bailey

 

Peter Dowd

 

Not called  NC11

 

To move the following Clause—

 

         

“Assessment of taxation regime for securitisation companies

 

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

 

Act, commission an independent assessment of the efficacy of the taxation

 

regime to which securitisation companies are subject and lay the assessment

 

before both Houses of Parliament.”

 

 


 

Tim Farron

 

Tom Brake

 

Not called  177

 

Page  87,  line  6,  leave out Clause 44

 


 

John McDonnell

 

Rebecca Long Bailey

 

Peter Dowd

 

Negatived on division  162

 

Page  87,  line  8,  leave out Clause 45

 


 

Mr Chancellor of the Exchequer

 

Agreed to  152

 

Schedule  9,  page  391,  leave out lines 20 to 22 and insert—

 

“23(1)  

Section 357GE (other interpretation) is amended as follows.

 

      (2)  

In subsection (1)—

 

(a)    

at the appropriate place insert—

 

““payment” includes payment in money’s worth.”, and

 

(b)    

omit the definition of “qualifying residual profit”.

 

      (3)  

After subsection (1) insert—

 

“(1A)    

In Chapters 3 and 4 of this Part “qualifying residual profit” of a trade,

 

in relation to any accounting period, is the amount obtained by the


 
 

Report Stage Proceedings: 5 September 2016              

3

 

Finance Bill, as amended, continued

 
 

application of Steps 1 to 4 in section 357C or (as the case may be)

 

section 357DA in relation to the trade for the accounting period.””

 

Mr Chancellor of the Exchequer

 

Agreed to  153

 

Schedule  9,  page  391,  line  27,  after “357A(11)”,” insert—

 

“( )    

in the entry for “qualifying residual profit of a trade (in Part 8A)”, in

 

the left hand column, after “in” insert “Chapters 3 and 4 of”,”

 


 

Mr Chancellor of the Exchequer

 

Agreed to  1

 

Schedule  10,  page  393,  line  26,  leave out “permanent establishment of a

 

multinational company” and insert “multinational company’s permanent establishment in

 

the United Kingdom”

 

Mr Chancellor of the Exchequer

 

Agreed to  2

 

Schedule  10,  page  402,  line  24,  at end insert—

 

“( )    

Section 259CBA contains definitions of certain terms used in section 259CB.”

 

Mr Chancellor of the Exchequer

 

Agreed to  3

 

Schedule  10,  page  404,  line  12,  at end insert—

 

“(2A)    

So far as the excess arises by reason of a relevant debt relief provision, it is to be

 

taken not to arise by reason of the terms, or any other feature, of the financial

 

instrument (whether or not it would have arisen by reason of the terms, or any

 

other feature, of the financial instrument regardless of the relevant debt relief

 

provision).”

 

Mr Chancellor of the Exchequer

 

Agreed to  4

 

Schedule  10,  page  404,  line  13,  leave out “For” and insert “Subject to that and

 

subsection (6A), for”

 

Mr Chancellor of the Exchequer

 

Agreed to  5

 

Schedule  10,  page  404,  line  15,  after “well” insert “as the terms, or any other

 

feature, of the financial instrument”

 

Mr Chancellor of the Exchequer

 

Agreed to  6

 

Schedule  10,  page  404,  line  22,  leave out “subsection (4)” insert “subsections (4)

 

and (4A)”


 
 

Report Stage Proceedings: 5 September 2016              

4

 

Finance Bill, as amended, continued

 
 

Mr Chancellor of the Exchequer

 

Agreed to  7

 

Schedule  10,  page  404,  line  48,  at end insert—

 

“(4A)    

Where the relevant assumption in subsection (4)(c) applies in relation to a payee

 

the following provisions are to be disregarded in relation to that payee for the

 

purposes of subsection (3)(b)—

 

(a)    

section 441 of CTA 2009 (loan relationships for unallowable purposes);

 

(b)    

section 690 of that Act (derivative contracts for unallowable purposes);

 

(c)    

Part 4 (transfer pricing);

 

(d)    

this Part;

 

(e)    

Part 7 (tax treatment of financing costs and income).”

 

Mr Chancellor of the Exchequer

 

Agreed to  8

 

Schedule  10,  page  405,  line  5,  leave out “For” and insert “Subject to subsection

 

(6A), for”

 

Mr Chancellor of the Exchequer

 

Agreed to  9

 

Schedule  10,  page  405,  line  6,  at end insert “as the terms, or any other feature, of

 

the financial instrument”

 

Mr Chancellor of the Exchequer

 

Agreed to  10

 

Schedule  10,  page  405,  line  9,  at end insert—

 

“(6A)    

For the purposes of this section disregard—

 

(a)    

any excess or part of an excess mentioned in subsection (2), and

 

(b)    

any under-taxed amount,

 

    

that arises as a result of a payee being a relevant investment fund (see section

 

259NZA).”

 

Mr Chancellor of the Exchequer

 

Agreed to  11

 

Schedule  10,  page  405,  leave out lines 10 to 35

 

Mr Chancellor of the Exchequer

 

Agreed to  12

 

Schedule  10,  page  406,  line  7,  at end insert—

 

“( )    

See section 259CBA for the meaning of “permitted taxable period”, “relevant

 

debt relief provision” and “under taxed”.”

 

Mr Chancellor of the Exchequer

 

Agreed to  13

 

Schedule  10,  page  406,  line  7,  at end insert—

 

“259CBA 

Interpretation of section 259CB

 

(1)    

This section has effect for the purposes of section 259CB.

 

(2)    

A taxable period of a payee is “permitted” in relation to an amount of ordinary

 

income that arises as a result of the payment or quasi-payment if—

 

(a)    

the period begins before the end of 12 months after the end of the

 

payment period, or


 
 

Report Stage Proceedings: 5 September 2016              

5

 

Finance Bill, as amended, continued

 
 

(b)    

where the period begins after that—

 

(i)    

a claim has been made for the period to be a permitted period in

 

relation to the amount of ordinary income, and

 

(ii)    

it is just and reasonable for the amount of ordinary income to

 

arise for that taxable period rather than an earlier period.

 

(3)    

Each of these is a “relevant debt relief provision”—

 

(a)    

section 322 of CTA 2009 (release of debts: cases where credits not

 

required to be brought into account),

 

(b)    

section 357 of that Act (insolvent creditors),

 

(c)    

section 358 of that Act (exclusion of credits on release of connected

 

companies’ debts: general),

 

(d)    

section 359 of that Act (exclusion of credits on release of connected

 

companies’ debts during creditor’s insolvency),

 

(e)    

section 361C of that Act (the equity-for-debt exception),

 

(f)    

section 361D of that Act (corporate rescue: debt released shortly after

 

acquisition), and

 

(g)    

section 362A of that Act (corporate rescue: debt released shortly after

 

connection arises).

 

(4)    

An amount of ordinary income of a payee, for a permitted taxable period, is

 

“under taxed” if the highest rate at which tax is charged on the taxable profits of

 

the payee in which the amount is included, taking into account on a just and

 

reasonable basis the effect of any credit for underlying tax, is less than the payee’s

 

full marginal rate for that period.

 

(5)    

The payee’s “full marginal rate” means the highest rate at which the tax that is

 

chargeable on the taxable profits mentioned in subsection (4) could be charged on

 

taxable profits, of the payee for the permitted taxable period, which include

 

ordinary income that arises from, or in connection with, a financial instrument.

 

(6)    

A “credit for underlying tax” means a credit or relief given to reflect tax charged

 

on profits that are wholly or partly used to fund (directly or indirectly) the

 

payment or quasi-payment.”

 

Mr Chancellor of the Exchequer

 

Agreed to  14

 

Schedule  10,  page  407,  line  42,  at end insert—

 

“( )    

Section 259DCA contains definitions of certain terms used in section 259DC.”

 

Mr Chancellor of the Exchequer

 

Agreed to  15

 

Schedule  10,  page  410,  line  31,  leave out “For” and insert “Subject to subsection

 

(8), for”

 

Mr Chancellor of the Exchequer

 

Agreed to  16

 

Schedule  10,  page  410,  line  40,  leave out “subsection (4)” and insert “subsections

 

(4) and (4A)”


 
 

Report Stage Proceedings: 5 September 2016              

6

 

Finance Bill, as amended, continued

 
 

Mr Chancellor of the Exchequer

 

Agreed to  17

 

Schedule  10,  page  411,  line  16,  at end insert—

 

“(4A)    

Where the relevant assumption in subsection (4)(c) applies in relation to a payee

 

the following provisions are to be disregarded in relation to that payee for the

 

purposes of subsection (3)(b)—

 

(a)    

section 441 of CTA 2009 (loan relationships for unallowable purposes);

 

(b)    

Part 4 (transfer pricing);

 

(c)    

this Part;

 

(d)    

Part 7 (tax treatment of financing costs and income).”

 

Mr Chancellor of the Exchequer

 

Agreed to  18

 

Schedule  10,  page  411,  line  22,  leave out “For” and insert “Subject to subsection

 

(8), for”

 

Mr Chancellor of the Exchequer

 

Agreed to  19

 

Schedule  10,  page  411,  line  32,  after “any” insert “excess or”

 

Mr Chancellor of the Exchequer

 

Agreed to  20

 

Schedule  10,  page  411,  line  35,  at end insert “or that arises as a result of a payee

 

being a relevant investment fund (see section 259NZA)”

 

Mr Chancellor of the Exchequer

 

Agreed to  21

 

Schedule  10,  page  411,  line  36,  leave out from beginning to end of line 12 on page

 

412

 

Mr Chancellor of the Exchequer

 

Agreed to  22

 

Schedule  10,  page  412,  line  31,  at end insert—

 

“( )    

See section 259DCA for the meaning of “permitted taxable period” and “under

 

taxed”.”

 

Mr Chancellor of the Exchequer

 

Agreed to  23

 

Schedule  10,  page  412,  line  31,  at end insert—

 

“259DCA 

Interpretation of section 259DC

 

(1)    

This section has effect for the purposes of section 259DC.

 

(2)    

A taxable period of a payee is “permitted” in relation to an amount of ordinary

 

income that arises as a result of the payment or quasi-payment if—

 

(a)    

the period begins before the end of 12 months after the end of the

 

payment period, or

 

(b)    

where the period begins after that—

 

(i)    

a claim has been made for the period to be a permitted period in

 

relation to the amount of ordinary income, and

 

(ii)    

it is just and reasonable for the amount of ordinary income to

 

arise for that taxable period rather than an earlier period.


 
 

Report Stage Proceedings: 5 September 2016              

7

 

Finance Bill, as amended, continued

 
 

(3)    

An amount of ordinary income of a payee, for a permitted taxable period, is

 

“under taxed” if the highest rate at which tax is charged on the taxable profits of

 

the payee in which the amount is included, taking into account on a just and

 

reasonable basis the effect of any credit for underlying tax, is less than the payee’s

 

full marginal rate for that period.

 

(4)    

The payee’s “full marginal rate” means the highest rate at which the tax that is

 

chargeable on the taxable profits mentioned in subsection (3) could be charged on

 

taxable profits, of the payee for the permitted taxable period, which include

 

ordinary income that arises from, or in connection with, a financial instrument.

 

(5)    

A “credit for underlying tax” means a credit or relief given to reflect tax charged

 

on profits that are wholly or partly used to fund (directly or indirectly) the

 

payment or quasi-payment.”

 

Mr Chancellor of the Exchequer

 

Agreed to  24

 

Schedule  10,  page  412,  line  43,  leave out “not so treated for the purposes of tax

 

charged on” and insert “brought into account by”

 

Mr Chancellor of the Exchequer

 

Agreed to  25

 

Schedule  10,  page  412,  line  44,  leave out “because that person brings the substitute

 

payment into account”

 

Mr Chancellor of the Exchequer

 

Agreed to  26

 

Schedule  10,  page  417,  leave out lines 21 to 32

 

Mr Chancellor of the Exchequer

 

Agreed to  27

 

Schedule  10,  page  418,  line  15,  after “income”” insert “of the payer for an

 

accounting period”

 

Mr Chancellor of the Exchequer

 

Agreed to  28

 

Schedule  10,  page  418,  line  18,  after “payer” insert “for that period”

 

Mr Chancellor of the Exchequer

 

Agreed to  29

 

Schedule  10,  page  418,  line  20,  after “payer” insert “for a permitted taxable

 

period”

 

Mr Chancellor of the Exchequer

 

Agreed to  154

 

Schedule  10,  page  418,  line  21,  at end insert—

 

“( )    

A taxable period of an investor is “permitted” for the purposes of paragraph (b)

 

of subsection (4) if—

 

(a)    

the period begins before the end of 12 months after the end of the

 

accounting period mentioned in paragraph (a) of that subsection, or

 

(b)    

where the period begins after that—

 

(i)    

a claim has been made for the period to be a permitted period in

 

relation to the amount of ordinary income, and

 

(ii)    

it is just and reasonable for the amount of ordinary income to

 

arise for that taxable period rather than an earlier period.”


 
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Revised 06 September 2016