| Previous Section | Index | Home Page |
Mr. Nigel Forman (Carshalton and Wallington): The nub of the hon. Gentleman's policy on the matter and, indeed, that of his hon. Friend the Member for Oxford, East (Mr. Smith), who spoke on the subject on Second Reading, seems to be phasing in. That implies either that everyone moves towards self-assessment more slowly, or that some groups are moved towards it by law more quickly than others. Which is it and can he explain more?
Mr. O'Brien: We want to ensure that the procedures are in place to enable the successful introduction of
self-assessment. We want to ensure that the computer and electronic lodgement systems and the machinery of how the system will work are properly organised. There are some question marks over that. There is also the question of training Inland Revenue staff.
All those problems must be resolved and we are concerned that the system will be rushed in and that Conservative Members will pay the price. After all, Labour Members of Parliament will have an excuse. We can say that we voted for the amendment to enable the system to be introduced properly. Today, Tory Members are offered their opportunity of an alibi to protect them against the bungling of their Treasury Ministers. They should vote for the amendment. Self-assessment will still happen, but it can be done properly. That is our offer to the House and that is why we are telling Conservative Members to vote for the amendment and delay self-assessment, or at least to support the other amendments so that we can deal with some of the more difficult issues that self-assessment raises.
Mr. Forman:
Is the hon. Gentleman aware that the date on which people must start to fill in the forms on the new basis has already been delayed by one year? What is the argument for delaying it further?
Mr. O'Brien:
I am about to set that out in more detail and if the hon. Gentleman--an old colleague from the Select Committee on Treasury and Civil Service--pays attention, he will learn that there are many reasons why the delay should be accepted. I invite him to conduct a survey among some of the companies in his constituency, as I did in mine recently. I asked them what they knew about self-assessment and whether they were happywith it.
Some were very happy, particularly the bigger companies with accountants who had been following the matter closely, but others were less sure. A leading company in Bayton road, Bedworth said that it felt, "badly informed" and did not yet understand what it might do, saying:
That company sought a more simple, straightforward explanation of the system.
A major manufacturer in Bedworth said, through its accounts clerk, that the introduction seemed rushed and sudden, which is not an uncommon response judging by the survey conducted by my office.
A wages clerk working for a business in Hartshill, who had an information pack, said:
She had had no time to look at it yet in detail but felt that it looked "very complicated". She also felt that there was "insufficient advice".
Mr. Tim Smith (Beaconsfield):
I wonder what leads the hon. Gentleman to suppose that, if we delayed self-assessment for another year, people in business who are very busy trying to run their businesses would attend to the matter in the next 12 months. Inevitably, there will be people who, however much information the Revenue puts out--it has put out some good, simple information,
Mr. O'Brien:
We would also be giving those businesses more time to understand what is happening. That extra time is extremely important. As I said, this is a major change to our tax system. I do not think that Conservative Members have comprehended the enormity of what is proposed. We should do it, but we should do it properly. Conservative Members are not yet sure how they will carry it out. They will create a series of difficulties for themselves, which need not be created, and will undermine the project in the process--a project that we all want to succeed in the longer term.
I also spoke to a small manufacturing and hire company in Coleshill, which said that it knew nothing about self-assessment but hoped that its accountant did. Another Coleshill business said that it knew it was coming, but knew little else about it and complained of "insufficient information". A day had been arranged for companies to be advised on self-assessment, but there was too much to do to take the day off to attend.
A self-employed man who runs a business called Sign Language said:
Those are the typical responses of small and medium-sized businesses on the subject. Conservative Members should talk to people in their areas and find out the response. Recently, I spoke to a meeting of small business men and women in Coventry, who expressed "trepidation" at the proposed changes.
It is not surprising that there is some concern among small businesses. They are right to be concerned. Hurried attempts at Government cost-cutting now are likely to cost small businesses and the self-employed dearly. Many will have to employ accountants to understand the forms and the complexities of the legislation.
Let us look at the Bill and the schedules to it. Just look at schedules 18 to 25, which I have here. They contain detailed and complex clauses and information, which will have to be understood and digested. They go on and on--54 pages of rules in close type.
Mr. Malcolm Bruce (Gordon):
The hon. Gentleman is making a detailed and cogent point on the problems of both businesses and individuals. Given the fundamental scale of the change and the substantial reductions in staff, how does he think the Treasury and the Inland Revenue will cope? Has he done any surveys of internal morale and mood within the latter organisation and of its ability to handle all the queries?
Mr. O'Brien:
That is a good point. It would appear from the Inland Revenue staff association that there are
How can one expect a self-employed person to be sure that he is obeying the law? Let us remember all the penalties that the new legislation will create. Following enactment of the Bill, self-assessment provisions will be found in the Taxes Management Act 1970, as amended by the Finance Act 1994, the Finance Act 1995, and now the Finance Bill in 1996. Those include amendments to amendments.
If I were self-employed and wanted to understand the law, I would need to read the 1970 Act, as amended by the 1994 Act, the 1995 Act and this Bill and I would have to understand which amendment applied to which amendment.
I shall give an example. If one wants to understand the complexities of self-assessment, one should look at clause 112, which is the first clause on the subject and amends section 8 of the 1970 Act, which was originally amended in the 1994 Act--that amendment was flawed, so section 8 was amended again in the 1995 Act. Does it really inspire confidence that the clause must be amended again in the Bill? This is the Government's second attempt to correct the clause.
I have glanced through the new section, as amended by the 1994 and 1995 Acts and the Bill. I must inform the Minister that the version that he is presenting to the House in clause 112, which amends section 8A(1) of the 1970 Act--on trustee's return--contains an obvious and stupid grammatical error. Line 4 refers to
when it should read, "payable by them" or
That is a small grammatical error. I make no more of it than that except to say that we are dealing with an amendment of an amendment of an amendment. That suggests a rushed, even slipshod approach. It is messy and it worries me that the Minister is cooking up a dog's dinner for business and the self-employed.
Mr. Denis MacShane (Rotherham):
On Government grammar, my hon. Friend may recall that in Prime Minister's Question Time earlier this afternoon, the Prime Minister said, in answer to a question about the CBI--
The Chairman:
Order. The hon. Gentleman is trying hard but he is not in order.
"There is a lack of clarity. Until more information is available we do not feel prepared".
"There was an awful lot of literature."
"I do not have any opinion on SA because I have never heard of it."
"the amount payable by him",
"payable by any one of them".
| Next Section
| Index | Home Page |