Public Bill Committee: 17th June 2008

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Finance Bill, continued

the forecast price is amended by the next Budget or pre-Budget

Report.”.’.

Definition of residence

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

NC5

To move the following Clause:—

‘(1)	An individual is resident in the United Kingdom for income tax purposes if—

(a)	during the tax year in question the individual spends (in total) more than

31 days in the United Kingdom; and

(b)	during the three-year period that includes the tax year in question and the

two tax years immediately preceding it the individual has spent (in total)

183 or more days in the United Kingdom, including—

(i)	the total number of days spent in the United Kingdom in the tax

year in question,

(ii)	one-third of the days in the tax year immediately preceding the

tax year referred to in sub-paragraph (i), and

(iii)

one-sixth of the days in the tax year immediately preceding the

tax year referred to in sub-paragraph (ii).

(2)	An individual found to be resident under subsection (1) shall be liable for income

tax on both their UK income and capital gains and any foreign income and capital

gains remitted to the United Kingdom.

(3)	In determining whether an individual fulfils the definition of residence under

subsection (1) treat each day the individual is physically present in the United

Kingdom as a day spent by the individual in the United Kingdom.

(4)	But in determining that issue do not treat as a day spent by the individual in the

United Kingdom any day on which the individual—

(a)	arrives in and departs from the United Kingdom on the same day;

(b)	is present in the United Kingdom for less than 24 hours for transit only;

(c)	is present in the United Kingdom by virtue of being employed as a crew

member of a foreign vessel;

(d)	is unable to leave the United Kingdom on the same day owing to a

medical condition;

(e)	is enrolled in full-time higher education in the United Kingdom;

(f)	is an exempt individual.

(5)	The Treasury shall, by regulations, define an exempt individual.

(6)	Regulations under subsection (5) shall be made by statutory instrument.

(7)	A statutory instrument containing regulations under subsection (5) may not be

made unless a draft of it has been laid before and approved by resolution of the

House of Commons.

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Finance Bill, continued

(8)	On the coming into force of this section, Chapter 2 of ITA 2007 shall cease to

have effect.’.

VAT on beverages

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC10

To move the following Clause:—

‘The Treasury shall, not later than six months after the passing of this Act, prepare

and lay before the House of Commons a report setting out the estimated costs to

the Exchequer, and the estimated health benefits to the population of the United

Kingdom, of reducing the amount of VAT payable on beverages containing fruit

juice to the lowest level permitted.’.

Fiscal impact of water charging in Northern Ireland

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC11

To move the following Clause:—

‘The Treasury shall, before the publication of the 2008 Pre-Budget Report,

prepare and lay before the House of Commons a report setting out its estimate of

the revenue gain for the Exchequer from the introduction of water charging in

Northern Ireland in each year to 2015.’.

Public Bill Committee: 17th June 2008

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Finance Bill, continued

Report on impact of Finance Bill on older people

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC13

To move the following Clause:—

‘It shall be the duty of the Treasury to prepare and lay before the House of

Commons, at the time of publication of each Finance Bill, a report on the impact

on individuals aged 60 and over of the measures contained in that Finance Bill.’.

Report on impact of Finance Bill on people on low incomes

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC14

To move the following Clause:—

‘It shall be the duty of the Treasury to prepare and lay before the House of

Commons, at the time of publication of each Finance Bill, a report on the impact

on individuals in the lowest income decile of the population of the measures

contained in that Finance Bill.’.

Report on exemption from taxation of foreign profits

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC15

To move the following Clause:—

‘(1)	The Treasury shall, before the publication of the 2008 Pre-Budget report, prepare

and lay before the House of Commons a report on the effects of introducing a

measure to exempt from corporation tax all dividends from non-portfolio

investments paid to UK resident companies.

(2)	For the purposes of this section, a non-portfolio investment is one where the UK

company holds at least 10 per cent. of the ordinary share capital of the investee

company.

(3)	The report under subsection (1) shall include consideration of the effect of such a

measure on—

(a)	the public finances;

(b)	UK companies;

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Finance Bill, continued

(c)	the competitiveness of the UK economy;

(d)	the attractiveness of the UK as a location for multinational headquarters;

(e)	the impact on repatriation of foreign profits back to the UK and the likely

effects on investment; and

(f)	the extent to which special measures would be needed to protect against

diversion of profits through countries with a low rate of corporation tax.’.

International Accountancy Standards

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC16

To move the following Clause:—

‘The Treasury shall lay before Parliament not later than 31st October 2008 a

report on progress towards the introduction of International Accountancy

Standards for all government departments and public sector entities.’.

PAYE reporting

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC17

To move the following Clause:—

‘The Treasury shall commission and lay before the House of Commons, within

12 months of the passing of this Act, an independent report into the feasibility and

estimated cost of introducing a system of monthly reporting to HM Revenue and

Customs of payments and deductions through the Pay as You Earn system.’.

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Finance Bill, continued

Harmonisation of income tax and national insurance contributions

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC18

To move the following Clause:—

‘(1)	If for any tax year—

(a)	the personal allowance under section 35 of the Income Tax Act 2007 (c.

3) is set at an amount which is not equal to the amount of the primary

threshold under section 5 of the Social Security Contributions and

Benefits Act 1992 (c. 4), or

(b)	the sum of the personal allowance and the basic rate limit under sections

35 and 10(2) of the Income Tax Act 2007 (c. 3) is set at an amount which

is not equal to the upper earnings limit under section 5 of the Social

Security Contributions and Benefits Act 1992 (c. 4),

the Treasury shall within one month of the passing of the Act which sets the

personal allowance or basic rate limit lay before Parliament a report explaining

the matters set out in subsection (2).

(2)	Those matters are—

(a)	why the amounts have diverged for the year, and the expected future path

of the amounts in relation to each other; and

(b)	the estimated cost to—

(i)	employers, and

(ii)

HMRC,

of operating a system of divergent thresholds and the savings that are

expected to result from a convergence of those thresholds.’.

Retirement Income Fund

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC19

To move the following Clause:—

‘(1)	The Finance Act 2004 is amended as follows.

(2)	In section 164 at end add “and

(g)	payments into a Retirement Income Fund.”.

(3)	In section 165 there is inserted in Pension rule 6 after paragraph (c) “or

(d)	a withdrawal from a Retirement Income Fund.”.

(4)	In section 165 after Pension rule 7 there is inserted—

“Pension rule 8

Before a member makes a withdrawal from a Retirement Income Fund, he must

buy a relevant linked annuity which is linked to the retail prices index, which pays

an income equivalent to the Minimum Income Requirement.”.

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Finance Bill, continued

(5)	In Schedule 28 after paragraph 16C there is inserted—

“Retirement Income Fund

16D(1)

Subject to sub-paragraphs (2) and (3) of this paragraph, a Retirement

Income Fund is a vehicle for the reinvestment of savings in retirement,

which—

(a)	has been established by a person designated by subsection (1)

of section 154; and

(b)	is a vehicle the investments in which are—

(i)	investments of a kind described in the Insurance

Companies Regulations 1994, Schedule X, Part 1, or

(ii)	approved by HM Revenue and Customs.

(2)	Funds held in the Retirement Income Fund as referred to in sub-

paragraph (1) may be withdrawn from the Retirement Income Fund by

the member as and when he elects.

(3)	A member may not invest in a Retirement Income Fund unless the

requirements of Rule 8 of section 165 have been met.

(4)	A Retirement Income Fund, and any income derived from it, must not

be capable of assignment or surrender by the member.

(5)	Any withdrawal from the Fund by the member under sub-paragraph

(2) shall be assessable to tax under Schedule E (and section 203 shall

apply accordingly) and shall be treated as earned income of the

member.

Minimum Retirement Income

16E(1)

The amount of Minimum Retirement Income shall be set for each

financial year following consultation by the Chancellor of the

Exchequer by order.

(2)	An order under this paragraph shall, in respect of each financial year

after that in which this section comes into force, be made on or before

31st January preceding the year in question.

(3)	An order under this paragraph shall be made by statutory instrument

and shall be subject to annulment in pursuance of a resolution of either

House of Parliament.”’.

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Finance Bill, continued

Dependant’s retirement income fund

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC20

To move the following Clause:—

‘(1)	The Finance Act 2004 is amended as follows.

(2)	In Schedule 28 after paragraph 22 insert—

“Dependant’s retirement income fund

22A(1)

Subject to sub-paragraphs (2) and (3) of this paragraph, a dependant’s

retirement income fund is a vehicle for the reinvestment of savings in

retirement which—

(a)	has been established by a person designated by subsection (1)

of section 154; and

(b)	is a vehicle the investments in which are—

(i)	investments of a kind described in the Insurance

Companies Regulations 1994, Schedule X, Part 1, or

(ii)	approved by HM Revenue and Customs.

(2)	Funds held in the retirement income fund as referred to in sub-

paragraph (1) may be withdrawn from the retirement income fund by

the members as and when he elects.

(3)	A dependant may not invest in a dependant’s retirement income funds

unless the requirements of Rule 8 of section 165 have been met.

(4)	A retirement income fund, and any income derived from it, must not

be capable of assignment or surrender by the member.

(5)	Any withdrawal from the fund by the member under sub-paragraph (2)

shall be assessable to tax under Schedule E (and section 203 shall

apply accordingly) and shall be treated as earned income of the

member.”.’.

Missing trader fraud

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

NC21

To move the following Clause:—

‘HMRC shall lay a report before Parliament every three months on the measures

taken by the Government to combat missing trader intra community (MTIC)

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Revised 17 June 2008