House of Commons Public Bill Committee Proceedings

House of Commons

Session 2008 - 09
Internet Publications
Other Bills before Parliament

351

SUPPLEMENT TO THE VOTES AND PROCEEDINGS

Tuesday 7 July 2009

Report Stage Proceedings

Finance Bill, As Amended

New Clauses

Transfers of trade to obtain terminal loss relief

Mr Chancellor of the Exchequer

Added  NC8

To move the following Clause:—

‘(1)
In section 393A of ICTA (set off of losses against profits of same or earlier

accounting period), after subsection (2D) insert—

“(2E)
But subsection (2A) above does not apply by reason of a company

ceasing to carry on a trade if—

(a)
on the company ceasing to carry on the trade, any of the activities

of the trade begin to be carried on by a person who is not (or by

persons any or all of whom are not) within the charge to

corporation tax, and

(b)
the company’s ceasing to carry on the trade is part of a scheme

or arrangement the main purpose, or one of the main purposes,

of which is to secure that subsection (2A) above applies to a loss

by reason of the cessation.”

(2)
The amendment made by subsection (1) has effect in relation to cessations of a

trade on or after 21 May 2009.’.

Report Stage Proceedings: 7 July 2009
352

Finance Bill, continued

Implementation of section 1

Mr Frank Field

Mr Greg Pope

Kate Hoey

Mark Fisher

Ms Katy Clark

Ms Diane Abbott

Mr Dai Havard

Mr Peter Kilfoyle

Paul Flynn

Mike Wood

Kelvin Hopkins

Jim Dowd

Ms Gisela Stuart

Michael Connarty

David Taylor

Janet Anderson

Lynne Jones

Alan Simpson

John McDonnell

Bob Spink

Jeremy Corbyn

Mr David Drew

Dr Vincent Cable

Mr Jeremy Browne

Mrs Ann Cryer

Mr Austin Mitchell

Jim Dobbin

Siobhain McDonagh

Mr Roger Godsiff

Mr David Cameron

Mr George Osborne

Mr Philip Hammond

Mr David Gauke

Mr Mark Hoban

James Duddridge

Derek Wyatt

Andrew Mackinlay

Ms Karen Buck

Ms Sally Keeble

Mark Durkan

Stewart Hosie

Mr Dai Davies

Dr Richard Taylor

Lady Hermon

Negatived on division  Nc1

To move the following Clause:—

‘(1)
The rates charged by virtue of section 1 shall not have effect until such date as

may be appointed by order made by the Treasury.

(2)
No such order may be made until the Chancellor of the Exchequer lays before

Parliament a statement that, in his opinion, measures have been taken to ensure

that no person is worse off by reason of the person’s income not being sufficient

to secure that the effect of the abolition of the 10p starting rate has been entirely

offset by the reduction of the basic rate, which took effect in the tax year 2008-09.

(3)
The power to make an order under subsection (1) shall be exercisable by statutory

instrument which shall be subject to annulment in pursuance of a resolution of the

House of Commons.’.

Anti-avoidance principle

Dr John Pugh

Mr Jeremy Browne

Not selected  Nc2

To move the following Clause:—

‘(1)
If, when determining the liability of a person to taxation, duty or similar charge

due under statute in the United Kingdom it shall be established that a step or steps

have been included in a transaction giving rise to that liability or to any claim for

an allowance, deduction or relief, with such steps have been included for the sole,

principal, main or explicit purpose of securing a reduction in that liability to

taxation, duty or similar charge with no other material economic purpose for the

inclusion of such a step being capable of demonstration by the taxpayer then

subject to the sole exception that the step or steps in question are specifically

permitted under the term of any legislation promoted for the specific purpose of

Report Stage Proceedings: 7 July 2009
353

Finance Bill, continued

permitting such use, such step or steps shall be ignored when calculating the

resulting liability to taxation, duty or similar charge.

(2)
In the interpretation of this provision a construction that would promote the

purpose or object underlying the provision shall be preferred to a construction

that would not promote that purpose or object.’.

Office of Tax Simplification

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

Negatived on division  NC3

To move the following Clause:—

‘(1)
The Treasury shall establish an Office of Tax Simplification.

(2)
Its mandate shall be to—

(a)
review tax law

(b)
make proposals on tax law reform and simplification.

(3)
Regulations shall specify the governance arrangements of the Office of Tax

Simplification.

(4)
Regulations made under this section may not be made unless they have been laid

before, and approved by a resolution of, the House of Commons.’.

Holiday accommodation report

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

Not called  NC4

To move the following Clause:—

‘(1)
The Chancellor of the Exchequer shall, before the publication of the 2009 Pre-

Budget Report, have compiled and laid before the House of Commons a report

containing an assessment of the impact of—

(a)
section 503 of ICTA, and

(b)
Chapter 6 of Part 3 of ITTOIA 2005,


on the liability to tax of commercially let furnished holiday accommodation.

(2)
Any such report shall address the impact on the UK tourism industry.

(3)
A Minister of the Crown must, not later than one month after the report has been

laid before the House of Commons, make a motion in that House in relation to the

report.’.

Report Stage Proceedings: 7 July 2009
354

Finance Bill, continued

Pre-commencement notification

Stewart Hosie

Not called  NC5

To move the following Clause:—

‘(1)
Part 7 of FA 2004 (disclosure of tax avoidance schemes) is amended as follows.

(2)
In section 308 (duties of promoter) after subsection (5) insert—

“(5A)
A person who is a promoter in relation to a notifiable proposal may seek

pre-commencement approval from HMRC as to whether the proposal is

in accordance with current legislation.

(5B)
HMRC shall respond within a reasonable period of time to any request

for pre-commencement approval under subsection (5A).’.’.

Competitiveness of the tax system

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

Not called  NC6

To move the following Clause:—

‘Prior to the first reading of a Finance Bill, the Treasury will lay before

Parliament a report on the impact on the competitiveness of UK economy of—

(a)
the measures set out in that Finance Bill,

(b)
the rates of—

(i)
corporation tax,

(ii)
income tax,

(iii)
national insurance,

(iv)
capital gains tax,

(v)
excise duties, and

(vi)
vehicle excise duties,

(c)
the complexity of the tax system, and

(d)
the relationship between the HMRC and the taxpayer.’.

Pension death benefits in higher education

Mr Frank Field

Not moved  NC7

To move the following Clause:—

‘(1)
Paragraph 15 of Schedule 28 to FA 2004 (meaning of “dependant”) is amended

as follows.

(2)
In subsection (2)(a) at end insert—

Report Stage Proceedings: 7 July 2009
355

Finance Bill, continued

“(aa)
has reached that age and is studying full-time for a higher

education qualification in medicine, veterinary science or

architecture or such other vocational courses as the Treasury

may prescribe by regulations, or”’.

Tax relief on donations to a registered political party

Martin Linton

Mr Gordon Prentice

Not selected  Nc9

To move the following Clause:—

‘(1)
Tax relief shall be given to individuals who make donations to a registered

political party.

(2)
To obtain tax relief under this section the following conditions must be

satisfied—

(a)
the individual who made the donation is a permissible donor as defined

in the Political Parties, Elections and Referendums Act 2000,

(b)
the registered political party to which the donation is made is a party

which, at the last general election preceding the donation, had at least two

members elected to the House of Commons,

(c)
conditions A to F in section 416 of ITA 2007 (meaning of “qualifying

donation”) would have been met if the donations had been made to a

charity, and

(d)
the donor has given a declaration in the manner specified by regulations

made by the Commissioners for Her Majesty’s Revenue and Customs

and containing any information and any statements required by

regulations.

(3)
Regulations made by the Commissioners for Her Majesty’s Revenue and

Customs under subsection 2(d) may provide for declarations—

(a)
to have effect,

(b)
to cease to have effect, or

(c)
to be treated as never having had effect.


in any circumstances and for any purposes specified by the regulations.

(4)
Regulations under subsection 2(d)—

(a)
shall be made by statutory instrument, and

(b)
shall be subject to annulment pursuant to a resolution of the House of

Commons.

(5)
Tax relief in relation to donations given by an individual in any fiscal year must

not exceed an amount to be set by regulations made by the Treasury.

(6)
Tax relief shall not be given on higher rate income tax.

(7)
Subject to subsections (5) and (6), the amount of tax relief shall be computed and

allocated to the political party to which the donation was given as if that party was

a charity to which Chapter 2 of Part 8 of ITA 2007 applies.’.

Report Stage Proceedings: 7 July 2009
356

Finance Bill, continued

Mr Frank Field

Mr Greg Pope

Lynne Jones

Alan Simpson

Ms Diane Abbott

John McDonnell

Kelvin Hopkins

Jeremy Corbyn

Mr David Drew

Dr Vincent Cable

Mr Jeremy Browne

Mrs Ann Cryer

Mr Austin Mitchell

Jim Dobbin

Siobhain McDonagh

Mr Roger Godsiff

Ms Karen Buck

Ms Sally Keeble

Mark Durkan

Steward Hosie

Bob Spink

Mr Dai Davies

Dr Richard Taylor

Lady Hermon

Not called  2

Page  1,  line  8  [Clause  1],  at end insert—

‘(3)
This section is subject to section [Implementation of section 1].’.

Dr Vincent Cable

Mr Jeremy Browne

Mr Colin Breed

Dr John Pugh

Negatived on division  37

Page  2,  line  10  [Clause  3],  leave out ‘£6,475’ and insert ‘£10,000’.

Mr Mark Hoban

Mr David Gauke

Mr Greg Hands

Not called  40

Page  3,  line  7  [Clause  6],  at end insert—

‘(3A)
At the end of section 646(8) of ITTOIA 2005 (adjustments between settlor and

trustees etc.), insert—

“(9)
A settlor of a settlement in respect of which he is liable to pay income tax

under section 624 or 629 is entitled to receive credit for any income tax

paid by the trustees of such a settlement in calculating his income tax

liability and to be repaid any excess of that credit over that liability.

(10)
A settlor who receives a credit under subsection (9) above is to that extent

not entitled to recover any tax from the trustees under subsection (1)

above.”

(3B)
The amendment made by subsection (3A) shall be deemed to have effect from 6

April 2006.’.

Dr Vincent Cable

Mr Jeremy Browne

Mr Colin Breed

Dr John Pugh

Not called  36

Page  3,  line  31  [Clause  8],  at end insert—

Report Stage Proceedings: 7 July 2009
357

Finance Bill, continued

‘(2A)
At the end of subsection 13(3) of ICTA 1988 (small companies’ relief), insert—

“(3A)
Where in any accounting period the profits of a company do not exceed

1/12 of the lower relevant maximum amount, the company may claim a

further reduction (to be known as the “very small companies’ relief”) on

the amount of corporation tax payable under this section.

(3B)
The Chancellor of the Exchequer shall, by regulations and within three

months of Royal Assent, prescribe the level of the very small companies’

relief.

(3C)
Regulations made under subsection (3B) may not be made unless a draft

of the statutory instrument containing the regulations has been laid

before, and approved by a resolution of, each House of parliament.”’.

Dr Vincent Cable

Mr Jeremy Browne

Mr Colin Breed

Dr John Pugh

Negatived on division  38

Page  4,  line  34  [Clause  11],  at end insert—

‘(3A)
After subsection (1A) insert—

“(1AB)
The rate under section 36 (1AA)(a) shall be reduced by 2 per cent. for the

tax year 2010-11 and by a further 2 per cent. for each subsequent tax

year.”’.

Further consideration adjourned until tomorrow.