Clause
98
VAT:
non-business use etc of business
goods
Question
proposed, That the clause stand part of the
Bill.
Mr.
Gauke:
The purpose of the clause is to restrict
adjustments for input VAT when an asset is used partly for business
purposes. HMRC has explained that the plan is to restrict adjustments
to a 10-year period, according to Budget notice 56. However, the
regulations do not limit the power in that way. Is there a particular
reason why? Is it still the Government’s intention that the
power should be restricted to adjustments over a 10-year
period?
John
Healey:
It is the Government’s intention simply
that the clause brings the Lennartz accounting period into line with
the capital goods scheme. At the same time, it implements the European
Court of Justice’s judgment in the Wollny case. We intend the
regulations to come into effect on 1 September. We have welcomed and
discussed all interested parties’ comments on the matter, and
particularly on transitional rules and retrospection, and we have been
able to assure them about both points. I hope that the Committee will
allow the clause to stand part of the Bill.
Question put and agreed
to.
Clause 98
ordered to stand part of the Bill.
Clause
99
VAT:
transfers of going
concerns
Question
proposed, That the clause stand part of the
Bill.
Mr.
Gauke:
The clause relates to circumstances in which a
business is transferred as a going concern, and it amends the VAT Act
1994 in which the transferor retains records. In the debate last year
about section 21 of the Finance Act 2006, we considered the issue of
records, again for the purposes of tackling MTIC fraud. The Paymaster
General made it clear that the burden of additional record keeping
would apply only to fraud matters, and that the power should be used
specifically to tackle large-scale fraud such as MTIC fraud. She also
said that it was impractical to try to limit the scope of the measure
with the legal definition of MTIC, but that was none the less the
purpose. Does the same thinking apply to clause 99? Will the Financial
Secretary confirm that the Paymaster General’s undertaking
regarding section 21 of the 2006 Act has been followed
through?
John
Healey:
The clause is not connected with MTIC fraud; it is
a simplification measure. It has been requested by business, it will be
welcomed by business and it will benefit about 50,000 transfers of
going concerns, 99 per cent. of which are among small
concerns.
Question
put and agreed to.
Clause 99 ordered to stand
part of the Bill.
Clause 100 ordered to stand
part of the Bill.
Clause
101
Abolition
of PRT for fields recommissioned after earlier
decommissioning
Question
proposed, That the clause stand part of the
Bill.
Mr.
Paul Goodman (Wycombe) (Con): It is a pleasure to see you
in the Chair, Mr. Gale. We now come to three clauses that
deal largely with the effects of petroleum revenue tax
on—
It
being twenty-five minutes past T
en o’clock,
T
he Chairman
adjourned the Committee without Question put, pursuant
to the Standing Order.
Adjourned till this day at
One
o’clock.
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