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Mr. David Heath: There is the age-old question whether, in subsection (1), the "may" should be a "will". I believe that it should.
The hon. Member for West Dorset (Mr. Letwin) referred to exports. There is a strong argument for using this mechanism for pre-cast concrete, which represents about 3 per cent. of UK sales, and 9 per cent. in the case of paving. There is clearly a problem.
It is hard to understand why the processes referred to in subsection (1)(c) are not listed, even in rudimentary form, especially as in clause 18(3) relevant substances are listed exhaustively.
Finally, under subsection (2)(c), it is hard to see why no interest is to be added if repayment is in the form of a refund, given that provision is made later in the clause for interest to be added to a credit. I ask the Minister to look at that anomaly.
Mr. Timms: We will be looking at the main points raised by the hon. Member for Croydon, South (Mr. Ottaway) and for Somerton and Frome (Mr. Heath) later.
It being Nine o'clock, The Deputy Chairman, pursuant to Orders [7 November and 9 April], put forthwith the Question already proposed from the Chair.
Clause 30 ordered to stand part of the Bill.
Clause 31
Question proposed, That the clause stand part of the Bill.
Mr. Ottaway: Clause 31 should, in truth, be considered with clause 32. It deals with repayments of overpaid levy. It provides that when a person has paid an amount to the commissioners by way of aggregates levy that was not levy due to them, they should be liable to repay the amount. That amount is repaid only on the making of a claim.
It would be helpful if the Minister spelled out his thinking with regard to the clause. How does he see it working, and under what circumstances are people likely to pay a levy that was not due? Will it be as a result of overcharging by Customs and Excise, in which case it would be an error on its part? Will it be repaid with interest under those circumstances?
Under what circumstances does the Financial Secretary envisage that a claim will be made? What would happen, for example, if Customs and Excise realised that some poor chap had overpaid the levy without realising it? Is it under an obligation to repay the money? Under clause 31(2), that does not seem to be the case. Will the Minister consider what would happen in the event of an error being made of which the levee was not aware? There is a three-year time limit under clause 32, which we can perhaps deal with later, along with schedule 8. It would assist the Committee if the Minister could enlighten us with regard to these important administrative points.
Mr. Timms: The clause provides for the repayment of overpaid levy. It enables Customs and Excise to prescribe in regulations the form and manner of claims for repayment. The measures allows for adjustments once errors of this nature are identified. It is clearly a necessary component of any fair tax and, as with so many other measures that we have been discussing, is a replication of measures that apply widely across the tax system and work well.
It will not be difficult for people to claim repayment. The hon. Gentleman referred to clause 31(2). The procedure will be kept as simple as possible. Details will be published in a public notice prior to the commencement date so there should be no difficulty about how to do that. The system will be designed to be fair; Customs and Excise will require evidence of any overpayment that is claimed. That will be specified in regulations and in the public notice. There will, of course, be the right of appeal against an initial decision by Customs and Excise, as is conventional, in the form of a review by Customs and Excise and, if the party is still unsatisfied, by appeal to an independent tribunal. These established and familiar arrangements work well elsewhere, and I hope that the Committee accepts that they will do so in this instance.
Mr. Ottaway: I am grateful for that, but the Minister has not dealt with my central point. What would happen when the person levied--the payer--had not made a claim because he was unaware that he had overpaid? Would Customs and Excise be under a duty to repay or to notify the person on whom the levy had been laid? The point applies in several areas. I have often wondered what happens in the Inland Revenue. If, for example, the Minister had inadvertently overpaid tax, I am sure that he would expect the Revenue to notify him if it knew about it. The same should apply here. The point is unclear, and I wonder whether the Minister might think about it and return to it on Report.
Mr. Timms: I shall be happy to reflect on the point. I do not believe that the Bill contains anything novel by comparison with arrangements that apply elsewhere. The position on liability and responsibility is set out in
clause 31(2), which compares with what happens elsewhere in the tax system. I have no doubt that if the commissioners became aware of overpayment, they would take steps to put it right.It would be unusual for the commissioners to be aware that tax had been overpaid if the person who had paid the levy was not aware of it. I cannot think what circumstances might give rise to that, but if the hon. Gentleman wants to raise any variations on that theme, I shall be happy to think about them.
Clause 31 ordered to stand part of the Bill.
Clause 32
Question proposed, That the clause stand part of the Bill.
Mr. Ottaway: Having just about heard an "Aye" out of the less than massed ranks on the Government Benches for the previous clause, I shall raise a point already alluded to in the previous debate. Does the three-year time limit stem from the knowledge of overpayment or from overpayment itself? If a chap had overpaid but did not become aware of it for a year, would the three years begin then or would it have begun at the date of overpayment?
My only other point relates to the terribly subjective reference to unjust enrichment in clause 32(2), which states:
- "In the case of any claim for a repayment of an amount of aggregates levy other than a claim to a repayment to which a person is entitled by virtue of tax credit regulations, it shall be a defence to that claim that the repayment of that amount would unjustly enrich the claimant."
One assumes that the decision would be taken by the commissioners, and I hope that the Minister will confirm that there will be a right of appeal. Perhaps that appeal should be beyond the appeal procedure set out in the Bill.
We are well aware that the concept of unjust enrichment is set out elsewhere, but I should be grateful if the Minister could tell us to what extent it applies in this provision. Perhaps the Minister may draw some comfort from subsection (4)(b), which deals with the extent to which
- "any enrichment of the taxpayer would be unjust".
Mr. Timms: The clause does indeed contain further provisions about repayment of the levy. The time limit of three years is set for claiming repayment of overpaid levy; that will be three years from the overpayment occurring, I think, but I may well want to return to that point before we conclude our consideration of the clause.
Non-payment of claims is provided for if that is considered to result in unjust enrichment. The circumstances that we have in mind are when an amount of
levy is due for repayment to the claimant, but another person has in fact borne the cost. In that situation, unjust enrichment would occur.The time limit is to establish reasonable control over the levy. It is similar to other time limits in Customs legislation. The three years run from the making of the claim--that is set out in 32(1). The measure allows for repayment of additional costs incurred, if they are sufficiently quantified. That relates to a point made earlier by the hon. Member for Croydon, South (Mr. Ottaway) on interest payable by Customs when levy has been overpaid. Interest is payable by Customs as long as an error by Customs led to the overpayment.
Mr. Ottaway: May I press the Minister on the point about the three years from the making of the claim? Once the claim has been made, what is the relevance of the three-year period? Can the claim relate back only three years, or do the commissioners have three years in which to make the payment? That would be ludicrous. The clause refers to an amount paid
- "three years before the making of the claim",
Mr. Timms: It is the former--it relates back.
Clause 32 ordered to stand part of the Bill.
Schedule 8
Aggregates levy: repayments and credits
Question proposed, That this schedule be the Eighth schedule to the Bill.
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