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Session 2007 - 08 Publications on the internet General Committee Debates Finance Bill |
Finance Bill |
The Committee consisted of the following Members:Alan
Sandall, James Davies, Committee
Clerks † attended the
Committee Public Bill CommitteeThursday 12 June 2008(Afternoon)[Sir Nicholas Winterton in the Chair]Finance Bill(Except
clauses 3, 5, 6, 15, 21, 49, 90 and 117 and new clauses amending
section 196 of the Finance Act
2003) 1
pm
The
Chairman: I can now begin our afternoon sitting, just a
few seconds late, as I can see 11 Committee members, which is the
quorum for this Committee. May I congratulate members of the Committee
on what I call the constructive way in which matters were dealt with
this morning? I delayed the official start of the sitting because a
particular hon. Member was not in his place, and he is responsible for
moving the first amendment. I have no reason to doubt that the
constructive way in which the Committee dealt with this
morning’s business will continue this
afternoon.
Schedule 41Penalties:
failure to notify and certain VAT and excise
wrongdoing Mr.
Jeremy Browne (Taunton) (LD): I beg to move amendment No.
196, in
schedule 41, page 406, line 13, leave
out ‘decision’ and insert
‘notice’.
The
Chairman: With this it will be convenient to discuss the
following amendments: No. 305, in
schedule 41, page 406, line 13, leave
out ‘decision of HMRC’ and insert
‘notice under sub-paragraph (1)(b)
of paragraph
16’. No.
306, in
schedule 41, page 406, line 14, leave
out ‘decision of HMRC’ and insert
‘notice under sub-paragraph (1)(b)
of paragraph
16’.
Mr.
Browne: Thank you, Sir Nicholas. I thought, this morning,
that I might have to play a nightwatchman’s innings in the short
period between the vote and 10.25 am. Instead, it is great to have the
opportunity to open the batting after the luncheon interval, and for
you to have kept one end blocked before I got to the wicket.
Amendment No.
196 is quite a simple amendment that carries on from this
morning’s deliberations on schedule 41, paragraph 17 of which
allows for appeal against a decision by Her Majesty’s Revenue
and Customs. The amendment would mean that an appeal would not be
against a decision but against a notice from HMRC that the relevant
person was liable to a penalty. It therefore addresses the same point
that I raised in amendment No. 181 to schedule 36—that time
should start ticking when the recipient receives the notice rather than
when it is issued and sent, because there might be
some delay between its being sent and the recipient receiving it, and
they might be disadvantaged as a consequence. The Financial Secretary
was unwilling to concede that point earlier, and I suspect that she
will take the same view now, but we felt that it would be helpful to
table a probing amendment to give her the opportunity to consider this
concern. Mr.
David Gauke (South-West Hertfordshire) (Con): May I
welcome you back to the Chair, Sir Nicholas, to perform your role as
umpire—to continue the cricketing analogy? The last time I heard
as tortuous a cricketing metaphor in Parliament was in Geoffrey
Howe’s speech in 1990, shortly after which the Prime Minister
fell, although I do not know whether we should read too much into that.
[Interruption.] Yes, let us not dwell on that any
longer. We
have tabled the amendments as a consequence of representations received
from the Institute of Chartered Accountants, which made the point that
taxpayers should have a right of appeal against any penalty notice
issued under paragraph 16 of the schedule, rather than against any
decision of HMRC to issue a penalty notice. The institute is supportive
of the approach taken in amendment No. 196, but we have made two small
amendments, so that rather than appeals against decisions of HMRC,
there are notices. There should be a right for taxpayers to appeal in
those circumstances.
The
Financial Secretary to the Treasury (Jane Kennedy): The
Bill states that the appeal is against a decision made by HMRC. That is
consistent both with how appeal provisions are worded in last
year’s Finance Act for the new penalties for incorrect returns
and with the effect of other appeal provisions in tax legislation. The
three amendments would change that to an appeal against notice of the
penalty rather against the decision itself. I know concern has been
expressed that the time limit for an appeal against a penalty decision,
which is 30 days, may expire before the taxpayer has even received a
notice of the penalty—that would clearly be wrong and would
undermine this important safeguard—but the legislation already
prevents that from happening.
Paragraph
18(2) of schedule 41 states that appeals against
penalties “shall
be treated for procedural purposes in the same way as an appeal against
an assessment to the tax”
For example, the time
limit for an appeal against a direct tax assessment runs from the date
on which the assessment is issued. The taxpayer is aware of that date
because it is on the assessment notice. Therefore, I can assure the
Committee that, as now, taxpayers will always have 30 days in which to
appeal, beginning with the day on which HMRC issue the penalty notice.
The amendments are unfair.
The hon.
Member for Taunton asked why it does not start from the date of receipt
of the notice. The time limits run from the date on which HMRC sends a
document, because that is the date it can be certain of. There can be
no certainty about the date that a document was received. If an appeal
is late because of postal delays, for example, the cause of the late
receipt would be taken into account in considering whether there was a
reasonable excuse for the lateness. If there was a reasonable excuse,
the late appeal would be accepted.
We have a sensible structure for dealing with appeals and notice and
penalty decisions. I hope that the hon. Gentleman will accept the
explanation that I have given and not press the amendment to a
vote.
Mr.
Browne: The Minister replied as I had anticipated. It was
not my intention to press the matter to a vote, because I merely wanted
to raise the issue—I did not expect her to be accommodating. On
that basis, I beg to ask leave to withdraw the amendment.
Amendment,
by leave,
withdrawn. Amendments
made: No. 242, in schedule 41, page 407, line 33, leave out from
‘company’ to second ‘may’ in
line 37 and insert
‘, the officer is liable to pay
such portion of the penalty (which may be 100%) as
HMRC’. No.
243, in
schedule 41, page 408, line 5, leave
out sub-paragraph (5) and
insert— ‘(5) Where HMRC have
specified a portion of a penalty in a notice given to an officer under
sub-paragraph (1)— (a)
paragraph 14 applies to the specified portion as to a
penalty, (b) the officer must
pay the specified portion before the end of the period of 30 days
beginning with the day on which the notice is
given, (c) paragraph 16(3) to
(5) and (7) apply as if the notice were an assessment of a
penalty, (d) a further notice
may be given in respect of a portion of any additional amount assessed
in a supplementary assessment in respect of the penalty under paragraph
16(6), (e) paragraphs 17 to 19
apply as if HMRC had decided that a penalty of the amount of the
specified portion is payable by the officer,
and (f) paragraph 23 applies as
if the officer were liable to a penalty.’.—[Jane
Kennedy.] Schedule
41, as amended, agreed
to. Clause
119 ordered to stand part of the
Bill. Clause
120 ordered to stand part of the
Bill. Schedule
42 agreed
to. Clause
121 ordered to stand part of the
Bill.
Clause 122Enforcement
by taking control of goods: england and
wales
‘except to
the extent that the regulations made under that Schedule provide for a
minimum period of less than five days, and paragraph 14 of that
Schedule shall not
apply.’.
The
Chairman: With this it will be convenient to discuss
amendment No. 282, in clause 124, page 77, line 31, at end
add— ‘(6) No such order may
be made unless the Commissioners have laid before the House of Commons
a report on the procedure they will adopt under section 122(2) and the
House of Commons has come to a resolution to the effect that that
procedure ensures adequate taxpayer
safeguards.’.
Mr.
Gauke: Thank you, Sir Nicholas. We had a little
trot-through there. It is time to bring that to an end, and this
will be a relatively brief
innings. Clause
122 relates to the enforcement by taking control of goods. Clause 124,
to which amendment No. 282 relates, is a consequential provision and,
for the benefit of the hon. Member for Wirral, West, it is entirely
sensible that these two matters be addressed at the same time. The
concern here is that under the existing provisions of the Taxes
Management Act 1970 section 61, with regard to destraint and the taking
control of goods, there are three taxpayer safeguards. First, no entry
to effect destraint without a court order. Secondly, HMRC must retain
the goods for at least five days to give the taxpayer a chance to find
the money. Thirdly, any sale must be made by public auction, with any
surplus being restored to the debtor.
The question
for this Committee is, what is the new procedure? There is nothing in
the Bill that gives us the answer. It is to be prescribed by
regulations under schedule 12 to the Tribunals, Courts and Enforcement
Act 2007. In this Bill we are agreeing to remove these
taxpayers’ safeguards. What we are seeking in tabling these two
amendments and having this debate is assurances from the Financial
Secretary that the safeguards that have traditionally been in place
will continue to be in place and that the taxpayer will not lose some
of those safeguards, which are not specified in the Bill. Our question
is, what safeguards will there be and what oversight will Parliament
have in ensuring that they are
satisfactory?
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