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Tax Allowances
Mrs. Curtis-Thomas: To ask the Chancellor of the Exchequer what assessment he has made of the benefits of introducing a system of tax allowances for entrepreneurial new companies. [124760]
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Mr. Timms: The Government are introducing a wide range of initiatives that will benefit entrepreneurial new companies. Small companies will benefit from the new 10 per cent. starting rate for Corporation Tax. R&D tax credits will encourage innovation by small and medium-sized companies. They increase tax relief for R&D spending, and companies not in profit such as start-up ventures, can take the relief up front as a cash payment. The Corporate Venturing Scheme will encourage companies to invest in small, higher-risk trading companies. The investment will attract corporation tax relief at 20 per cent. Enterprise Management Incentives will make it easier for new companies to attract and retain the best people. Companies can reward key staff with share options free of income tax and national insurance charges. The development of each of these three schemes has involved detailed consultation with businesses and representative bodies. All three have been welcomed.
Capital Gains Tax
Mrs. Curtis-Thomas: To ask the Chancellor of the Exchequer what assessment he has made of the impact of the increase in capital gains tax on share options in each year since 1996. [124759]
Dawn Primarolo: There is no Capital Gains Tax (CGT) on the exercise of share options. CGT may be payable when shares acquired on exercise of the options are sold if the gains exceed the annual exempt amount. The effective rate of CGT depends on the size of the gain, whether the shares were business or non-business assets, and how long the shares have been held. The effect of taper relief is to reduce the tax on gains the longer the shares are held. CGT taper relief normally runs from the date that the shares were acquired.
The November 1999 Pre-Budget Report announced the intention to make further improvements in CGT in order to promote productivity. Following consultation, the Budget announced proposals to improve the CGT treatment of shares owned by employees and officers in the trading companies in which they work. For periods from 6 April 2000 such shares will be treated as business assets, and will benefit from more generous taper rates. Business asset treatment applies whether the shares were acquired through share options or by other means.
The Government are introducing in the current Finance Bill two new employee share plans. Under the All Employee Share Plan, employees who keep their shares in the plan until they sell them will have no CGT to pay however great the increase in value of those shares. In addition, under the Enterprise Management Incentive (EMI) scheme, companies will be able to grant each of their key employees share options worth up to £100,000, normally without any Income Tax or National Insurance charge on exercise. When the shares are sold, CGT taper relief will normally start from the date the options were granted.
Tobin Tax Initiative
Mr. Sheerman: To ask the Chancellor of the Exchequer what discussions he has had with financial organisations on the (a) viability and (b) acceptability of the Tobin Tax initiative. [123179]
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Miss Melanie Johnson: The Chancellor meets regularly with members of the international financial community to discuss a range of measures designed to reduce currency market instability.
The Government believe the Tobin tax idea is, in principle, interesting, but has a number of practical drawbacks. In particular, it could introduce serious economic distortions to the international financial system, and is unlikely to have much effect in a crisis. It would be practically impossible to achieve global coverage, and there would be huge scope for avoidance.
Child Care
Ms Harman: To ask the Chancellor of the Exchequer what tax relief is available to companies which wish to help their employees with child care; and if he will make a statement. [124778]
Dawn Primarolo: Employers can get tax relief, under the normal business tax rules, for their day-to-day expenditure on child care provision for employees' children, whether given directly or indirectly. The relief is given by deducting such expenditure when working out their business profit for tax purposes.
They can also claim relief through the capital allowances system for certain capital expenditure on furnishing and equipping nurseries and playschemes (and for the buildings if the employer is carrying on a qualifying trade in the industrial sector).
Royal Taxation
Mr. Baker: To ask the Chancellor of the Exchequer, pursuant to paragraph 20 of the Memorandum of Understanding on Royal Taxation, if an inventory exists to distinguish assets held by the Queen (a) as Sovereign and (b) as a private individual. [124214]
Mr. Gordon Brown [holding answer 5 June 2000]: There is a computerised inventory of the Royal Collection which identifies assets held by the Queen as Sovereign and as a private individual.
Mr. Baker: To ask the Chancellor of the Exchequer for what reason inheritance tax is not payable on private possessions passed from one sovereign to the next. [124212]
Mr. Gordon Brown [holding answer 5 June 2000]: The tax arrangements for the Queen and Prince of Wales are set out in the Memorandum of Understanding on Royal Taxation, attached to the Report of the Royal Trustees published on 11 February 1993 (HC 464).
Mr. Baker: To ask the Chancellor of the Exchequer (1) what variations have been notified under paragraphs 33 to 35 of the Memorandum of Understanding on Royal Taxation; [124216]
- (2) on how many occasions a disagreement has occurred under the terms of paragraph 31 of the Memorandum of Understanding on Royal Taxation. [124215]
Mr. Gordon Brown [holding answer 5 June 2000]: Amendments to the original Memorandum of Understanding were announced in October 1996 to reflect changes in the arrangements for paying tax under self-assessment.
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A copy of the amended Memorandum was placed in the House of Commons Library.
The normal rules of taxpayer confidentiality apply to matters under paragraph 31 of the Memorandum of Understanding.
Royal Trustees
Mr. Baker: To ask the Chancellor of the Exchequer if he will list the Royal Trustees and the dates on which they have met since 1 May 1997. [124421]
Mr. Gordon Brown [holding answer 5 June 2000]: Under the Civil List Act 1952, the Royal Trustees are designated to be those holding the offices of First Commissioner of HM Treasury (the Prime Minister), the Chancellor of the Exchequer and the Keeper of HM Privy Purse. Consequently the current Royal Trustees are:
- The right hon. Tony Blair MP
- The right hon. Gordon Brown MP
- Sir Michael Peat KCVO.
Royal Collection
Mr. Baker: To ask the Chancellor of the Exchequer if he will make a statement on the tax position in respect of the Royal Collection. [124213]
Mr. Gordon Brown [holding answer 5 June 2000]: The Royal Collection is administered under the terms of a charitable trust. The tax treatment is the same as for any other charitable trust.
Free Television Licenses
Mr. Chope: To ask the Chancellor of the Exchequer if he will give the basis of his oral statement of 6 April 2000, Official Report, column 1137, that 11,000 pensioners in the Christchurch constituency will receive free colour television licences. [123919]
Mr. Andrew Smith [holding answer 5 June 2000]: The basis of the Chancellor's oral statement to the House on 6 April was his Pre-Budget Report announcement in November 1999 that free TV licences will be available to all pensioners aged 75 and over from autumn 2000.
Aggregates Tax
Mr. Levitt: To ask the Chancellor of the Exchequer (1) what analysis has been (a) carried out and (b) published by the Government on the price sensitivity of demand for primary aggregates and to quantify the impact of the proposed aggregates tax on demand for primary aggregates; [124440]
- (2) what analysis has been (a) carried out and (b) published by the Government about price sensitivity of demand for recycled and secondary aggregates and to quantify the impact of the proposed aggregates tax on demand for recycled and secondary aggregates. [124441]
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Mr. Timms: The estimated impact of the proposed aggregates levy on the demand for aggregates is given in the Aggregates Levy Regulatory Impact Assessment, published on 21 March 2000.
Mr. Levitt: To ask the Chancellor of the Exchequer (1) what assessment has been made by the Government about the impact of an aggregates tax on total vehicle mileage involved in the supply of aggregates from all sources of supply; [124432]
- (2) what assessment has been made of the impact of an aggregates tax on the volume of aggregates transported by Rail Freight. [124433]
Mr. Timms: The introduction of the aggregates levy will make the price of aggregates better reflect their true social and environmental costs and encourage the use of recycled aggregates. We do not expect there to be a significant impact on the transportation of aggregates.
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