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Schedule 3
Amendments made: No. 61, in page 156, line 7, at end insert--
5A.--(1) Section 109 of the Taxes Management Act 1970 (corporation tax on close company in connection with loans to participators etc) shall be amended as follows.
(2) In subsection (3A) (interest under section 87A on so much of tax under section 419 of Taxes Act 1988 as is referable to amount of loan or advance repaid shall not be payable in respect of any period after repayment made)--
(a) after "If" there shall be inserted "(a)";
(b) after "principal Act," there shall be inserted "or
(b) there is such a release or writing off of the whole or any part of the debt in respect of a loan or advance as is referred to in that subsection,";
(c) after "amount repaid" there shall be inserted ", released or written off"; and
(d) after "the repayment was made" there shall be inserted "or the release or writing off occurred".
(3) This paragraph has effect in relation to the release or writing off of the whole or part of a debt on or after 6th April 1999.'.
No. 62, in page 160, line 13, leave out second 'and'.
No. 63, in page 160, line 16, at end insert
'and
(c) after "the repayment is made" there shall be inserted "or the release or writing off occurs".'.
No. 64, in page 160, line 17, leave out from '(4))' to 'there' in line 18 and insert--
'(a) after "Where" there shall be inserted "(a)";
(b) after "that loan or advance," there shall be inserted "or
(b) the release or writing off of the whole or any part of the debt in respect of a loan or advance occurs on or after the day on which tax by virtue of this section becomes due in relation to that loan or advance,"; and
(c) after "repayment", in the second and third places where it occurs,'.--[Mr. Geoffrey Robinson.]
Schedule 13
Amendments made: No. 6, in page 216, line 25, leave out '£10 million' and insert '£15 million'.
No. 7, in page 216, line 27, leave out '£11 million' and insert '£16 million'.
No. 8, in page 234, line 5, at end insert--
'() provides a benefit or facility for the individual;'.--[Mr. Geoffrey Robinson.]
Schedule 16
Amendments made: No. 16, in page 258, line 50, leave out
'exemption from income tax or corporation tax in respect of the'
and insert
'any exemption from income tax or corporation tax in respect of, or of a part of, the income or'.
No. 17, in page 259, line 1, leave out second 'the'.
No. 18, in page 259, line 32, leave out
'paragraph 5(3) above is satisfied'
and insert
'sub-paragraph (3) of paragraph 5 above either--
(i) is satisfied, or
(ii) were any such exemption as is mentioned in paragraph (b) of that sub-paragraph to be disregarded, would be satisfied.'.--[Mr. Geoffrey Robinson.]
Schedule 18
Amendments made: No. 29, in page 297, leave out lines 23 to 49 and insert--
9.--(1) No claim to which this paragraph applies may be made by a company before it delivers a company tax return for the period to which the claim relates.
(2) This paragraph applies to a claim by a company for any repayment of income tax called for by virtue of--
(a) section 6(2) of the Taxes Act 1988 (exclusion of income tax charge in case of UK resident company or income within chargeable profits for corporation tax), or
(b) exemptions from income tax conferred by the Corporation Tax Acts.
(3) This paragraph applies to a claim by a company for payment of a tax credit, unless--
(a) the company is wholly exempt from corporation tax or is only not so exempt in respect of trading income, and
(b) the tax credit is not one in respect of which a payment on account may be claimed by the company under Schedule 19AB to the Taxes Act 1988 (pension business).
10.--(1) In Part VII of this Schedule (general provisions as to claims and elections) paragraphs 57 to 57B contain provisions as to the circumstances in which a claim or election may or must be made, or is to be treated as having been made, in a company tax return.
(2) A claim to which Part VIII or IX of this Schedule applies (claims for group relief or capital allowances) can only be made by being included in a company tax return (see paragraphs 64 and 76).'.
No. 30, in page 314, leave out lines 34 to 37, and insert--
57.--(1) This paragraph applies to a claim or election for tax purposes which affects only one accounting period ("the relevant accounting period").
(2) If notice has been given under paragraph 3 requiring a company to deliver a company tax return for the relevant accounting period, a claim or election by the company which can be made by being included in the return (as originally made or by amendment) must be so made.
(3) If a company has delivered a company tax return for the relevant accounting period, a claim or election made by the company which could be made by amending the return is treated as an amendment of the return.
The provisions of paragraph 15 (amendment of return by company) apply.
(4) Schedule 1A to the Taxes Management Act 1970 (claims and elections not included in returns) applies to a claim or election made by a company which cannot be included in a company tax return for the relevant accounting period.
This applies in particular to a claim or election made--
(a) before any notice is given under paragraph 3 requiring a company tax return for the relevant accounting period, or
(b) at a time when its return for the relevant accounting period cannot be amended.
57A.--(1) This paragraph applies to a claim or election for tax purposes if--
(a) the event or occasion giving rise to it occurs in one accounting period (the period to which it "relates"), and
(b) it affects one or more other accounting periods (whether or not it also affects the period to which it relates).
(2) If a company makes a claim or election which--
(a) relates to an accounting period for which the company has delivered a company tax return and could be made by amendment of the return, or
(b) affects an accounting period for which the company has delivered a company tax return and could be given effect by amendment of the return,
the claim or election is treated as an amendment of the return.
The provisions of paragraph 15 (amendment of return by company) apply.
(3) Schedule 1A to the Taxes Management Act 1970 (claims and elections not included in returns) applies to a claim or election made by a company if or to the extent that it is not--
(a) made by being included (by amendment or otherwise) in the company tax return for the accounting period to which it relates, and
(b) given effect by being included (by amendment or otherwise) in company tax returns for the accounting periods affected by it.
57B.--(1) Schedule 1A to the Taxes Management Act 1970 applies to a claim or election for tax purposes which is not within paragraph 57 or 57A, whether or not it is included (by amendment or otherwise) in a company tax return.
(2) The provisions of this Schedule do not apply where or to the extent that the provisions of Schedule 1A apply.
57C.--(1) Paragraphs 57 to 57B have effect subject to any express provision to the contrary.
(2) Nothing in those paragraphs affects the time limit or any other conditions for making a claim or election.
(3) Where Schedule 1A to the Taxes Management Act 1970 applies by virtue of any of those paragraphs and the claim or election results in an increase in the amount of tax payable, all such adjustments by way of assessment or otherwise shall be made as are necessary to give effect to it.'.
No. 31, in page 320, line 32, leave out 'which one person' and insert
'which--
(a) a claim for group relief may be made without being accompanied by a copy of the notice of consent to surrender given by the surrendering company, and
(b) one company'.
No. 32, in page 320, line 34, after first 'of' insert
'claiming or surrendering group relief or'.
No. 33, in page 322, leave out lines 37 to 41 and insert--
'(5) A determination by the Inland Revenue under this paragraph is final and conclusive as to the basis of charge to be used for the accounting period concerned.'.
No. 34, in page 324, line 2, at end insert--
84A.--(1) This paragraph applies to an amount stated in a company tax return for an accounting period which is required to be included in the return and which affects or may affect--
(a) the tax payable by the company making the return for another accounting period, or
(b) the tax liability of another company for any accounting period.
(2) If such an amount can no longer be altered it is taken to be conclusively determined for the purposes of the Corporation Tax Acts in relation to that other period or other company.
Sub-paragraphs (3) to (5) explain what is meant by "can no longer be altered".
(3) An amount is regarded as one that can no longer be altered if--
(a) the period specified in paragraph 15(4) (general period for amendment by company) has ended,
(b) any enquiry into the return has been completed and the period specified in paragraph 34(1) (period for amendment by company after enquiry) has ended,
(c) if the Inland Revenue amend the return under paragraph 34(2), the period within which an appeal may be brought against that amendment has ended, and
(d) if an appeal is brought, the appeal has been finally determined.
(4) If the return is amended by the company under a provision that allows an amendment after the end of the period specified in paragraph 15(4), an amount affected by the amendment ceases to be regarded as one that can no longer be altered until after whichever is the last of the following--
(a) the end of the period within which notice of enquiry into the return may be given in consequence of the amendment;
(b) if such a notice is given, the end of the period specified in paragraph 34(1);
(c) if the Inland Revenue amend the return under paragraph 34(2), the end of the period within which an appeal against that amendment may be brought;
(d) if an appeal is brought, the date on which the appeal is finally determined.
(5) If the return is amended by the Inland Revenue under paragraph 80(3) (consequential amendment of return where amount available by way of capital allowances is reduced), an amount affected by the amendment ceases to be regarded as one that can no longer be altered until after--
(a) the end of the period within which an appeal against that amendment may be brought, or
(b) if an appeal is brought, the date on which the appeal is finally determined.
(6) For the purposes of this paragraph an amount carried forward from a period for which a return was made under section 11 of the Taxes Management Act 1970 is not regarded as one required to be included in a company tax return for a later period.
(7) Nothing in this paragraph affects any power to make an assessment other than a self-assessment or the power to make a discovery determination.'.--[Mr. Geoffrey Robinson.]
Schedule 19
Amendments made: No. 35, in page 335, line 35, leave out from '(4)' to end of line 40 and insert
'omit "by discharge or repayment".'.
No. 36, in page 335, line 40, at end insert--
'(4) After subsection (4A) insert--
"(4B) Schedule 1A to the Taxes Management Act 1970 (claims and elections not included in return) applies to a claim for relief under subsection (4) above unless--
(a) the claim is included (by amendment or otherwise) in the return for the period in which the loan or advance was made, and
(b) the relief may be given at the time the claim is made.".'.
No. 37, in page 336, line 36, leave out from 'Paragraphs' to 'do' in line 38 and insert
'57 to 57C of Schedule 18 to the Finance Act 1998 (general provisions as to procedure on claims and elections)'.
No. 38, in page 336, line 40, leave out '9(1)' and insert '9(2)'.
No. 39, in page 337, line 24, leave out '9(1)' and insert '9(2)'.--[Mr. Geoffrey Robinson.]
Schedule 27
Amendments made: No. 41, in page 385, line 27, column 3, leave out '589(9A)' and insert '589A(9A)'.
No. 14, in page 392, line 12, in column 3 at the beginning insert--
In section 797A(5), paragraph (c) and the word "and" preceding it.'.
'In section 797(3B)(b), the words "or in accordance with subsection (3) of that section".
No. 27, in page 392, line 20, at end insert--
'1990 c. 1. The Capital Allowances Act 1990. Section 76(3).'.
No. 28, in page 392, line 23, leave out 'This repeal' and insert--
'1. The repeal of section 76(3) of the Capital Allowances Act 1990 has effect in relation to every chargeable period ending on or after 12th May 1998.
2. The repeal of section 42(6) and (7) of the Finance (No. 2) Act 1997'.
No. 40, in page 398, line 30, column 3, at end insert--
'In section 419(4), the words "by discharge or repayment".'.
--[Mr. Geoffrey Robinson.]
Order for Third Reading read.
4.53 pm
Dawn Primarolo: I beg to move, That the Bill be now read the Third time.
This is the second Finance Bill of the Parliament. It continues the process, which the Labour Government started on their election in 1997, of modernising the British economy, with the objective of raising the sustainable rate of long-term growth and ensuring that everyone has a share in rising prosperity. The Bill implements the second Budget of my right hon. Friend
the Chancellor of the Exchequer. The aim of the Budget is to turn ambition into achievement, encourage work, promote enterprise and support families.
The Bill is all about a Government keeping their promises and, in it, we continue our manifesto pledges. We have kept our promise to hold the basic and top rates of income tax at their current rates, which is delivered in clause 25. We have kept our promise to cut value added tax on domestic fuel to 5 per cent., which was delivered in the first Finance Bill, and not to extend VAT to food, children's clothing, books, newspapers and public transport fares. We have kept our promise to examine the tax and benefits system and announced the working families tax credit. We have kept our promise to reduce VAT on energy-saving materials for those in receipt of grants through Government and local authority schemes.
The Bill has sent the Opposition into confusion, especially the Liberal Democrats who, at times during the Bill's passage, were changing their policy positions as we progressed through the day, let alone the week. In Standing Committee on the Bill, the Opposition voted for amendments that would have cost at least £7 billion; in addition to which, they voted for amendments to the Social Security Bill worth £1.5 billion. The shadow Chancellor's view is that
"There is no moral content in voting for more public spending",
but that is not a view we share. Which public services should be cut to make good the £8.5 billion? That is the question that the Opposition have to answer this evening. Which taxes would they increase? Would they prefer to create another debt mountain, like the previous Government?
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