House of Commons Public Bill Committee Proceedings

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

673

House of Commons

Tuesday 1st July 2008

Report Stage Proceedings

Finance Bill, As Amended

[First Day]

Mr Chancellor of the Exchequer

Agreed to

That the order in which proceedings on consideration of the Finance Bill are taken shall

be: new Clauses relating to income tax; amendments relating to Clauses 1 to 3 and

Schedule 1; new Clauses relating to the powers of HM Revenue and Customs;

amendments relating to Part 7; new Clauses relating to inheritance tax; amendments

relating to Clause 8 and Schedule 4; new Clauses relating to information about and

simplification of taxation; amendments relating to Schedule 3; new Clauses relating to

vehicle excise duty and fuel duties; amendments relating to Clauses 15 and 75 and

Schedules 7 and 17; remaining proceedings.

New Clauses relating to income tax

Personal allowance for those aged under 65

Mr Chancellor of the Exchequer

Added  NC11

To move the following Clause:—

‘(1)
For the tax year 2008-09 the amount specified in—

(a)
section 35 of ITA 2007, and

(b)
section 257(1) of ICTA,


(personal allowance for those aged under 65) is replaced with “£6,035”.

(2)
Accordingly—

(a)
section 57 of ITA 2007, so far as relating to the amount specified in

section 35 of that Act, and

(b)
section 257C of ICTA, so far as relating to the amount specified in

section 257(1) of that Act,


(indexation) do not apply for the tax year 2008-09.

Report Stage Proceedings: 1st July 2008
674

Finance Bill, continued

(3)
This section does not require a change to be made in the amounts deductible or

repayable under PAYE regulations before 7 September 2008.’.

Basic rate limit

Mr Chancellor of the Exchequer

Added  NC12

To move the following Clause:—

‘(1)
In section 10 of ITA 2007 (income charged at main rates: individuals), for

subsection (5) substitute—

“(5)
The basic rate limit is £34,800.”

(2)
The amendment made by subsection (1) has effect for the tax year 2008-09 and

subsequent tax years.

(3)
But until 7 September 2008 for the purpose of ascertaining the amounts

deductible or repayable under PAYE regulations it may be assumed that the

figure specified in section 10(5) of ITA 2007 for the tax year 2008-09 is

£36,000.’.

Interim statements to Parliament

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Mr Brooks Newmark

Not called  NC1A

To move the following Clause:—

‘On any occasion when the Chancellor of the Exchequer or a Treasury Minister

announces to Parliament any change or intended future change to—

(a)
income tax rates,

(b)
income tax thresholds, or

(c)
income tax personal allowances,

other than in the course of a statement to Parliament presenting a Budget or Pre-

Budget Report, the Treasury must publish a current forecast of—

(a)
public sector net borrowing,

(b)
growth rate of gross domestic product, and

(c)
consumer price inflation,

for the current fiscal year and each of the subsequent four fiscal years, updated to

take account of that announcement.’.

Report Stage Proceedings: 1st July 2008
675

Finance Bill, continued

Income tax rates

Mr George Osborne

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Negatived on division  NC4

To move the following Clause:—

‘(1)
The amendments made by the provisions of this Act specified in subsection (2)

shall cease to have effect at midnight on 5 January 2009 unless the conditions set

out in subsection (3) have been satisfied.

(2)
The provisions referred to in subsection (1) are—

(a)
section 3(2) and (3), and

(b)
section 3(7)(a) and Schedule 1 (in so far as they relate to the starting rate).

(3)
The conditions referred to in subsection (1) are that—

(a)
the Chancellor of the Exchequer shall have laid before the House of

Commons a statement setting out the measures taken, or intended to be

taken, to mitigate the effect of the amendments made by the provisions

of this Act specified in subsection (4), when taken together, on those for

whom such effect is a net increase in income tax payable, and

(b)
the House of Commons shall by resolution have approved such

statement.

(4)
The provisions referred to in subsection (3) are—

(a)
sections 1, 3(2) and 3(3),

(b)
section 3(7)(a) and Schedule 1 (in so far as they relate to the starting rate),

and

(c)
any other provision of this Act the effect of which is to change the bands

of income on which income tax is charged.’.

Harmonisation of income tax and national insurance contributions

Mr Philip Hammond

Mr Mark Hoban

Mr David Gauke

Justine Greening

Not called  NC6

To move the following Clause:—

‘(1)
If for any tax year—

(a)
the personal allowance under section 35 of the ITA 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 ITA 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),

Report Stage Proceedings: 1st July 2008
676

Finance Bill, continued


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.’.

Personal allowances

David Taylor

Mr Gordon Prentice

Mr Frank Field

Mr Jim Devine

Ms Katy Clark

Mr Peter Kilfoyle

Jeremy Corbyn

Mr David Chaytor

Mike Wood

Mr Martin Caton

Mark Durkan

Ms Diane Abbott

Mark Fisher

Lynne Jones

Mr Paul Truswell

Mrs Anne Cryer

Not called  NC10

To move the following Clause:—

‘(1)
The Treasury must by regulations made by statutory instrument vary section 35

of ITA 2007 (personal allowances for those aged under 65) so as to achieve the

outcome specified in subsections (2) and (3).

(2)
For the tax year 2008-09 50 per cent. of income in excess of £6,400 (up to a

maximum of £600) shall be added to the personal allowance, subject to

subsection (3).

(3)
That addition shall be withdrawn at the rate of £10 for every £100 of income in

excess of £7,600, so that—

(a)
a taxpayer with an income of £7,600 receives an addition to the personal

allowance of £120, and

(b)
a taxpayer with an income of £13,600 receives no such addition.

(4)
Regulations under this section may make such transitional or incidental provision

as the Treasury thinks fit.

(5)
A statutory instrument containing regulations under this section may not be made

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

of the House of Commons.’.

Report Stage Proceedings: 1st July 2008
677

Finance Bill, continued

Independent review of income taxation

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

Not called  NC13

To move the following Clause:—

‘(1)
The Chancellor of the Exchequer must appoint a person to review the operation

of the provisions of the ITA 2007 and sections 1 to 3 (income tax) of this Act.

(2)
That person must, within 12 months of the coming into force of this Act, carry out

and report on a review of those provisions and, where he does so, must send a

report on the outcome of his review to the Chancellor of the Exchequer as soon

as reasonably practicable after completing the review.

(3)
That person must, upon the amendment by future legislation of any provision

contained in ITA 2007, carry out and report on a review under this section within

12 months of that amendment coming into force.

(4)
A report received by the Chancellor of the Exchequer under subsection (2) must

be laid before the House of Commons.’.

Personal allowances (No.2)

David Taylor

Mr Gordon Prentice

Mr Frank Field

Mr Jim Devine

Ms Katy Clark

Mr Peter Kilfoyle

Mr Dai Davies

Paul Flynn

Kelvin Hopkins

Colin Burgon

Mr David Drew

Jeremy Corbyn

Mr David Chaytor

Mike Wood

Mr Martin Caton

Mark Durkan

Ms Diane Abbott

Mark Fisher

Lynne Jones

Mr Paul Truswell

Mrs Anne Cryer

Not called  NC20

To move the following Clause:—

‘(1)
The Treasury must by regulations made by statutory instrument vary section 35

of ITA 2007 (personal allowances for those aged under 65) so as to achieve the

outcome specified in subsections (2) and (3).

(2)
For the tax year 2008-09 50 per cent. of income in excess of £6,400 (up to a

maximum of £600) shall be added to the personal allowance, subject to

subsection (3).

(3)
That addition shall be withdrawn at the rate of £10 for every £100 of income in

excess of £7,600, so that—

(a)
a taxpayer with an income of £7,600 receives an addition to the personal

allowance of £600, and

(b)
a taxpayer with an income of £13,600 receives no such addition.

(4)
Regulations under this section may make such transitional or incidental provision

as the Treasury thinks fit.

Report Stage Proceedings: 1st July 2008
678

Finance Bill, continued

(5)
A statutory instrument containing regulations under this section may not be made

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

of the House of Commons.’.

amendments relating to clauses 1 to 3 and schedule 1

Lynne Jones

David Taylor

Jeremy Corbyn

Dr Ian Gibson

Kelvin Hopkins

Not called  102

Page  1,  line  8  [Clause  1],  at end add ‘, unless subsection (3) applies.

(3)
If this subsection applies—

(a)
the starting 10%,

(b)
the basic rate is 22%, and

(c)
the higher rate is 40%.

(4)
Subsection (3) applies in the case of any person who has notified the

Commissioners for Her Majesty’s Revenue and Customs that he wishes his

income to be charged at the rates specified in that subsection and not at the rates

specified in subsection (2).’.

Lynne Jones

David Taylor

Jeremy Corbyn

Dr Ian Gibson

Kelvin Hopkins

Not called  103

Page  2,  line  18  [Clause  3],  leave out subsections (2) and (3).

Lynne Jones

David Taylor

Jeremy Corbyn

Dr Ian Gibson

Kelvin Hopkins

Not called  104

Page  2,  line  22  [Clause  3],  leave out subsection (5).

Lynne Jones

David Taylor

Jeremy Corbyn

Dr Ian Gibson

Kelvin Hopkins

Not called  105

Page  2,  line  26  [Clause  3],  leave out ‘the starting rate and’.

Report Stage Proceedings: 1st July 2008
679

Finance Bill, continued

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

Negatived on division  6

Page  2,  line  27  [Clause  3],  at end insert—

‘(8)
The Chancellor of the Exchequer shall, within six months of the coming into

force of this section, lay before the House of Commons a report containing an

assessment of the combined impact of—

(a)
the increase in personal allowances, and

(b)
the abolition of the starting rate of income tax,


on individuals with a gross income under £13,000 per annum.’.

Lynne Jones

David Taylor

Jeremy Corbyn

Dr Ian Gibson

Kelvin Hopkins

Not called  106

Page  101,  line  15  [Schedule  1],  after ‘(2)’, insert ‘Unless section 1(3) of FA 2008

applies,’.

Lynne Jones

David Taylor

Jeremy Corbyn

Dr Ian Gibson

Kelvin Hopkins

Not called  107

Page  101,  line  17  [Schedule  1],  at end insert—

‘(3A)
After subsection (2) insert—

“(2A)
If section 1(3) of FA 2008 applies, income tax is charged—

(a)
at the starting rate on an individual’s income up to the starting

rate limit, and

(b)
at the basic rate on an individual’s income above the starting rate

and up to the basic rate limit.”’.

Mr Chancellor of the Exchequer

Agreed to  5

Page  101  [Schedule  1],  leave out lines 19 and 20 and insert—

    ‘(5)
Insert at the end—’.

Lynne Jones

David Taylor

Dr Ian Gibson

Kelvin Hopkins

Not called  108

Page  101,  line  24  [Schedule  1],  at end insert—

‘(8)
The starting rate limit is £2,150.’.