House of Commons

Session 2006-07 Publications on the internet Bill Home Page

Tuesday 15th May 2007

Public Bill Committee

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New Amendments handed in are marked thus *

Other Amendments not tabled within the required notice period are marked thus #

Finance Bill

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(except Clauses 1, 3, 7, 8, 12, 20, 21, 25, 67 and 81 to 84, Schedules 1, 18, 22 and 23, and New Clauses relating to Microgeneration)

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Note

The amendments have been arranged in accordance with the Order of the Committee [8th May].

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Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

38

Schedule 3, page 90, line 16, after ‘payments’, insert ‘for a year of assessment’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

39

Schedule 3, page 90, line 19, after ‘services’, insert ‘for that year of assessment’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

40

Schedule 3, page 90, line 21, leave out from ‘person’ to ‘the’ in line 22 and insert ‘whose sole or main business is the provision and facilitation of’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

41

Schedule 3, page 90, line 23, leave out ‘involved with the company’ and insert ‘regularly involved with all or most aspects of running the company on an ongoing basis’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

42

Schedule 3, page 90, line 24, at end insert—

‘(1A) In considering whether a company is a managed service company within the meaning of subsection (1), no regard shall be had to any other companies with which the MSC provider is involved’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

43

Schedule 3, page 90, line 35, leave out ‘subsection’ and insert ‘subsections’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

44

Schedule 3, page 90, line 35, after ‘(1)(d)’, insert ‘or (2)’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

45

Schedule 3, page 90, line 36, leave out from ‘providing’ to end of line and insert ‘services of a nature provided by advisers in a professional capacity, including legal, accounting and company secretarial advice.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

46

Schedule 3, page 90, line 36, at end insert—

‘(3A) For the purposes of subsection 3, accounting advice includes, but is not limited to, advice and assistance concerning:

(a) preparation or provision of records, returns, financial statements, reports or financial information concerning accounting;

(b) auditing, insolvency or taxation matters;

(c) communication and representations made on behalf of a client to third parties in matters concerning accounting, auditing, insolvency or taxation.

(3B) The Treasury may by order provide for a non-exhaustive list of professional services which fall within the meaning of subsection (3) and (3A) above.

(3C) The Treasury may not make an order under subsection (3B) unless a draft of it has been laid before and approved by a resolution of the House of Commons.’.

Mr Stephen Timms

97

Schedule 3, page 90, line 40, leave out from ‘services);’ to end of line 42 and insert—

‘(5) Subsection (4) does not apply if the person or an associate of the person—

(a) does anything within subsection (2)(c) or (e), or

(b) does anything within subsection (2)(d) other than influences the company’s finances or activities by doing anything within subsection (2)(b).’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

47

Schedule 3, page 91, line 2, at end insert—

‘(3A) An MSC provider may be a partner in a partnership (other than the individual referred to in section 61B(1)(a)) and may, for the purposes of section 61B(1)(d), carry on, through the partnership, the business of promoting or facilitating the partnership to provide the services of individuals.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

48

Schedule 3, page 92, line 2, leave out ‘mentioned in section 61D(1)(b)’ and insert ‘which satisfies both section 61D(1)(b) and section 61D(1)(c).’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

49

Schedule 3, page 95, line 45, at end insert—

‘61K Implementation, investigation and enforcement

(1) The provisions of this Chapter may be administered and enforced only by officers of the Revenue and Customs acting with the authority of the Commissioners for Her Majesty’s Revenue and Customs.

(2) A certificate of the Commissioners for HMRC stating that an officer of Revenue and Customs has authority to act under this Chapter shall be conclusive evidence of this fact.’.

Mrs Theresa Villiers
Mr Mark Hoban
Mr Paul Goodman
Mr Mark Francois
Mr David Evennett

82

Schedule 3, page 96, line 9, leave out ‘an officer of Revenue and Customs considers’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

50

Schedule 3, page 96, line 10, after ‘Customs’, insert ‘, acting with the authority of the Commissioners for Her Majesty’s Revenue and Customs,’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

51

Schedule 3, page 96, line 12, at end insert—

‘(1A) A certificate of the Commissioners for Her Majesty’s Revenue and Customs stating that an officer of HMRC has authority to act under the regulations provided for in subsection (1) shall be conclusive evidence of this fact.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

52

Schedule 3, page 96, line 16, leave out ‘encouraged, facilitated’ and insert ‘actively encouraged or facilitated’.

Mr Stephen Timms

98

Schedule 3, page 96, line 17, leave out ‘facilitated or otherwise’ and insert ‘or’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

53

Schedule 3, page 96, line 20, at end insert—

‘(2A) No person shall fall within the scope of subsection (2)(c) above unless they knew or should have reasonably been expected to know that the services of the individual were being provided by a managed service company.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

54

Schedule 3, page 96, line 20, at end insert—

‘(2B) Ordinary employees of the MSC provider shall not fall within the scope of subsection (2). For the purposes of this subsection, “ordinary employees” means employees who are not involved with organising, managing or directing the overall activities of the MSC provider.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

55

Schedule 3, page 96, line 20, at end insert—

‘(2C) An individual whose services are provided by the managed service company does not fall within subsection (2) unless he knew or should have reasonably been expected to know that his services were being provided by a managed service company.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

60

Schedule 3, page 96, line 20, at end insert—

‘(2D) A person does not fall within subsection (2)(c) merely by virtue of contracting with businesses who provide the services of individuals to it and which may be MSCs.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

61

Schedule 3, page 96, line 20, at end insert—

‘(2E) A person does not fall within subsection (2)(c) merely by virtue of carrying on a business consisting only of placing individuals with persons who wish to obtain their services (including by contracting with companies which provide those services); but this subsection does not apply if the person, or an associate of the person, does anything within any of the paragraphs (c) to (e) of subsection (2) of section 61B.’.

Mr Stephen Timms

99

Schedule 3, page 96, line 21, after ‘by’ insert ‘virtue of—

(a) ’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

56

Schedule 3, page 96, leave out line 22 and insert ‘services of a nature provided by advisers in a professional capacity, including legal, accounting and company secretarial advice.’.

Mr Stephen Timms

100

Schedule 3, page 96, line 22, at end insert ‘, or

(b) placing the individual with persons who wish to obtain the services of the individual (including by contracting with the MSC for the provision of those services).’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

57

Schedule 3, page 96, line 22, at end insert—

‘(3A) For the purposes of subsection 3, accounting advice includes, but is not limited to, advice and assistance concerning:

(a) preparation or provision of records, returns, financial statements, reports or financial information concerning accounting;

(b) auditing, insolvency or taxation matters;

(c) communication and representations made on behalf of a client to third parties in matters concerning accounting, auditing, insolvency or taxation.

(3B) The Treasury may by order provide for a non-exhaustive list of professional services which fall within the meaning of subsection (3) and (3A) above.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

58

Schedule 3, page 96, line 22, at end insert—

‘(3C) In determining the amount sought to be recovered under these provisions from any person, regard must be had to the degree of involvement by that person in the activities of the MSC, the running of the MSC or the provision of services of the individual.’.

(3D) Any notice given under this section must include details of all those persons under subsection (2) from whom recovery is being, or has been, sought.

(3E) The Treasury may specify by order the sequence in which categories of persons against whom recovery will be sought under this section.

(3F) HM Revenue and Customs may not pursue persons mentioned in subsection (2)(c) under the provisions of this section unless, in the opinion of an officer of Revenue and Customs—

(a) it is impossible to recover the specified amount from persons mentioned in paragraphs (a) and (b), or

(b) it is impracticable to recover the specified amount from those persons.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

101

Schedule 3, page 96, leave out lines 35 and 36.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

59

Schedule 3, page 96, line 37, after ‘subsection’, insert ‘(3B), (3E) or’.

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Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

62

Schedule 4, page 98, line 34, leave out from beginning to end of line 34 on page 100.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

63

Schedule 4, page 99, line 11, leave out ‘£25,000’ and insert ‘£100,000’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

64

Schedule 4, page 101, line 12, leave out from ‘if’ to the end of line 14 and insert ‘it is made in connection with any arrangement which is not a qualifying arrangement under section 103E.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

65

Schedule 4, page 104, line 23, at end insert—

‘103E Meaning of “qualifying arrangement”

(1) For the purposes of this chapter, an arrangement is a qualifying arrangement if—

(a) the individual as a partner in a firm or as member of an LLP carries on a trade which is conducted on a commercial basis and with a view to the realisation of profits and involves genuine financial risk; and

(b) before the individual commences carrying on such trade, the Commissioners for Her Majesty’s Revenue and Customs have on the application of the firm or LLP notified the firm or LLP that the Commissioners are satisfied that the arrangement is being entered into for genuine commercial reasons and not as part of a scheme or arrangement of which the sole or main expected benefit is the obtaining of a reduction in tax liability by means of sideways relief or capital gains relief.

(2) An application under subsection (1) shall be in writing and shall contain particulars of the arrangements.

(3) If the Commissioners for Her Majesty’s Revenue and Customs consider that the particulars or any further information provided under subsection (1) of this subsection are insufficient for the purposes of this section, they must notify the applicant as to what further information they require for those purposes within 30 days of receiving the particulars or information.

(4) If any such further information is not provided within 30 days from the notification, or such further time as the Commissioners allow, they need not proceed further on the application.

(5) The Commissioners for Her Majesty’s Revenue and Customs shall notify their decision to the applicant within 30 days of receiving the application under subsection (1)(b) or, if they give notice under subsection (3) above, within 30 days of the notice being complied with.

(6) If the Commissioners for Her Majesty’s Revenue and Customs notify the applicant that they are not satisfied as mentioned in subsection (1)(b) above or do not notify their decision to the applicant within the time required by subsection (3) above, the applicant may within 30 days of the notification of that time require the Commissioners to transmit the application, together with any notice given and further particulars furnished under subsection (3) above, to the Special Commissioners; and in that event any notification by the Special Commissioners shall have effect for the purposes of subsection (1) above as if it were a notification by the Commissioners.

(7) If any particulars furnished under this section do not fully and accurately disclose all facts and considerations material for the decision of the Commissioners for Her Majesty’s Revenue and Customs or the Special Commissioners, any resulting notification that the Commissioners or Special Commissioners are satisfied as mentioned in subsection (1)(b) above shall be void.

(8) The Commissioners for Her Majesty’s Revenue and Customs may by regulations provide that any activities of a specified description shall be precluded from being qualifying arrangements for the purpose of this section, where specified means specified in the regulations.

(9) The regulations under subsection (8) above may—

(a) make provision having retrospective effect,

(b) contain incidental, supplemental, consequential and transitional provisions and savings, and

(c) make different provisions for different cases or purposes.

(10) No regulations may be made under this section unless a draft of them has been laid before and approved by a resolution of the House of Commons.’.

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Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

31

Clause 27, page 17, line 28, at end insert—

‘(A1) The purpose of this section is that relief for allowable losses shall not be granted where a person deliberately and knowingly enters into complex arrangements intended to avoid liability to capital gains tax, income tax or corporation tax.

(A2) This section shall be construed purposively in line with the principles set out in the statement of principles issued by Her Majesty’s Revenue and Customs on 6 December 2006.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

34

Clause 27, page 17, line 29, at beginning insert ‘Subject to section 16B below,’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

30

Clause 27, page 17, line 33, leave out ‘, or one of the main purposes,’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

29

Clause 27, page 17, line 34, after ‘arrangements’, insert ‘taken as a whole’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

27

Clause 27, page 17, line 34, leave out ‘secure a tax advantage’ and insert ‘avoid a liability to capital gains tax, corporation tax or income tax’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

32

Clause 27, page 17, line 34, at end insert ‘; and

(c) the arrangements are not prescribed arrangements.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

36

Clause 27, page 17, line 34, at end insert ‘; and

(c) the arrangements, taken as a whole, are not genuine commercial arrangements.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

37

Clause 27, page 17, line 34, at end insert—

‘(1A) This section does not apply where the aggregate of a person’s allowable losses does not exceed £25,000 in the year of assessment.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

26

Clause 27, page 17, line 38, leave out from ‘enforceable),’ to end of line 7 on page 18.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

33

Clause 27, page 17, line 38, leave out ‘and’ and insert—

‘ “prescribed” means set out in regulations made by the Commissioners for Her Majesty’s Revenue and Customs.’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

28

Clause 27, page 18, line 11, leave out ‘tax advantage is secured for’ and insert ‘avoidance of liability to taxation relates to’.

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Mr David Evennett

35

Clause 27, page 18, line 12, at end insert—

‘16B Clearance procedure

(1) Section 16A shall not affect the operation of section 135 or 136 in any case where, before the issue is made, the Board have, on the application of either company mentioned in section 137(1), notified the Company that the Board are satisfied that the exchange, reconstruction or amalgamation will be effected for bona fide commercial reasons and will not form part of any such scheme or arrangements as are mentioned in section 137(1).

(2) Any application under subsection (1) above shall be in writing and shall contain particulars of the operations that are to be effected; and the Board may, within 30 days of the receipt of the application or of any further particulars previously required under this subsection, by notice require the applicant to furnish further particulars for the purpose of enabling the Board to make their decision; and if any such notice is not complied with within 30 days or such longer period as the Board may allow, the Board need not proceed further on the application.

(3) The Board shall notify their decision to the applicant within 30 days of receiving the application or, if they give a notice under subsection (2) above, within 30 days of the notice being complied with.

(4) If the Board notify the applicant that they are not satisfied as mentioned in subsection (1) above or do not notify their decision to the applicant within the time required by subsection (3) above, the applicant may within 30 days of the notification or of that time require the Board to transmit the application, together with any notice given and further particulars furnished under subsection (2) above, to the Special Commissioners; and in that event any notification by the Special Commissioners shall have effect for the purposes of subsection (1) above as if it were a notification by the Board.

(5) If any particulars furnished under this section do not fully and accurately disclose all facts and considerations material for the decision of the Board or the Special Commissioners, any resulting notification that the Board or Commissioners are satisfied as mentioned in subsection (1) above shall be void.’.

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Prepared: 15 May 2007