|Previous Section||Index||Home Page|
Domicile is a common-law concept that connects a person with a system of law. It is not a tax-law concept-tax law simply uses domicile status to determine certain tax issues-so the question whether a person is domiciled in the UK is to be decided primarily by reference to principles of common law. Domicile potentially depends on a wide range of factors, and it is a concept that is quite hard to define. It is often said to equate to an individual's "permanent home". It is sometimes suggested that it is the place that someone expects to be buried, although that is only a rather approximate definition. Normally, a person takes his or her domicile at birth from their father, but once that person reaches adulthood
they can change their domicile and make a domicile of choice in a different country, if that is their wish.
People who are resident in the UK but who are not domiciled or ordinarily resident are eligible to claim the remittance basis of taxation for income tax and for capital gains tax. That means that they are taxable on their foreign income and gains only if they are brought-if they are remitted-into the UK. Any UK-source income, however, is fully taxable in the UK. I would be interested to know a little more about the issue that the hon. Gentleman raised about university lecturers in his constituency, because the only impact of those arrangements, of course, would be on people who were receiving income from outside the UK above a de minimis level, in addition to what I presume would be his constituents' university incomes in the cases to which he referred. However, I would be perfectly happy to have a look at the details of those cases, if he wanted me to do so.
The alternative to the remittance basis is the arising basis, under which a UK resident pays UK income tax and capital gains tax on all his or her worldwide income and gains wherever they arise, subject to any relief due under double taxation agreements. The hon. Gentleman's constituents could certainly take advantage of that basis if they chose, in which case they would be taxed in exactly the same way as people resident and domiciled in the UK. That is the basis on which the vast majority of the UK population is taxed.
The remittance basis has existed for a long time. The hon. Gentleman said that it sat ill with the party of Clement Attlee and Harold Wilson, but the remittance basis in fact goes back long before their premierships to the 1800s, and both those extremely distinguished former leaders of my party saw fit to leave it in place. Businesses see it as playing an important role in ensuring that the UK attracts skilled people from abroad to work, do business and invest. We would place ourselves at a significant competitive disadvantage if we simply scrapped the remittance basis at a time when countries with low tax regimes are competing to attract talent and investment-that would be an own goal. I do not think that that was what the hon. Gentleman was calling for, but as he mentioned competitiveness, it is important to explain why the arrangements exist.
We considered that the tax rules for non-domiciles needed to be reformed to make them fairer and more sustainable, which was why we implemented a major package of reforms to the remittance basis in the Finance Act 2008. The hon. Gentleman criticised us for taking time over the reforms, but they are complicated and it was important to take the time to get them right. In particular, as he said, we introduced a £30,000 annual tax charge for those non-domiciles choosing to use the remittance basis who have lived in the UK for more than seven years. We also abolished personal allowances for income tax and the annual exempt amount for capital gains tax for those claiming the remittance basis, closed a number of loopholes allowing non-domiciles unfairly to remit offshore income and gains to the UK without paying tax on them-that is the loophole to which he referred early in his speech-and tightened the day counting rules to make it more difficult for people to become non-resident and avoid UK tax, as some were unfairly doing.
The reforms were designed to strike the right balance between promoting fairness and maintaining UK competitiveness. People choosing to make their home in the UK for the longer term now make a greater contribution through the tax system. At the same time, the remittance basis continues to play a valuable role in supporting competitiveness, which is particularly important, as I have said, in the current economic climate and as the economy moves back towards growth. Of course, it should not be forgotten that non-domiciles still contribute a significant amount of tax-it is estimated at £4 billion a year-to the Exchequer. The hon. Gentleman complained about the lack of data. The nature of the subject means that sometimes there are not as many data as one might like, but I can give him information about the total amount of tax that we estimate is contributed currently.
The reforms have achieved their objective. We estimate that, as a result, the Exchequer will gain an additional £700 million this year and about £500 million next year and thereafter. My right hon. Friend the Chancellor made it clear during the 2008 Budget that we would not make further substantive changes to the remittance basis during this Parliament or the next. The hon. Gentleman asked me to renounce that commitment, but I will not do so. We stand by that commitment, because we take the view that it is the right thing to do-that is something that I have in common with Clement Attlee and Harold Wilson.
Since 2008, we have worked with external stakeholders to ensure that the new rules deliver what we promised. As a result, we made further minor changes in the Finance Act 2009 to address concerns, particularly those raised by people on low incomes. That work has been widely praised and has helped to ensure that we deliver sustainable and fair changes.
I agree with the hon. Gentleman's view that some people with a privileged position in the democratic process should pay UK tax in full on all their global income, gains and assets, wherever they arise. This is how the vast majority of the UK population is taxed, so it seems right to me, as it does to him, that MPs and Members of the House of Lords should be taxed on that basis and should not have access to the remittance basis. The hon. Gentleman asked some perfectly reasonable questions about Lord Ashcroft, and I would be as intrigued as to whether he knows the answers. The hon. Gentleman will, of course, recognise that it is not for me to answer them, although I am disturbed to hear that he received a threatening letter from the noble Lord's solicitors.
The Government have consistently promoted the principle that that Members of Parliament should be full UK taxpayers. For example, the 2008 White Paper on House of Lords reform proposed that Members of the reformed second Chamber should be resident in the UK for tax purposes. We are now finalising draft legislation setting out the framework for a reformed second Chamber. We supported the intention behind the private Members' Bills introduced by my hon. Friend the Member for Pendle (Mr. Prentice) in this place and by Lord Oakeshott of Seagrove Bay in the other place, both of which sought to restrict membership of Parliament to those paying full UK taxes.
People other than parliamentarians can, of course, participate to a significant degree in the democratic process, and we have stated our view that the relationship
between tax status and democratic participation deserves wider consideration. In view of strong support in both Houses, we took action and legislated in the Political Parties and Elections Act 2009 to provide that anyone wishing to donate or loan more than £7,500 to a political party in a calendar year would be required to confirm that they were resident, ordinarily resident and domiciled in the UK for tax purposes at the time at which the donation was made. Without such a declaration, the donation or loan will not be regarded as permissible. The provisions will ensure that anyone wishing to donate or loan a significant amount to a political party or other regulated entity must pay UK tax in full. I think that the hon. Gentleman will welcome that legislation.
Returning to the hon. Gentleman's specific question about MPs and Members of the House of Lords, I assure him that we are committed to introducing legislation in this Parliament to ensure that Members of Parliament are taxed in the same way as the vast majority of UK taxpayers. My right hon. and learned Friend the Leader of the House made that clear at Prime Minister's questions on 16 December when she made the point that, as the hon. Gentleman put it, there should be no representation without taxation. She said:
"We will introduce legislation to ensure that people are domiciled, resident and ordinarily resident in order to sit in this House or in the House of Lords."-[Official Report, 16 December 2009; Vol. 502, c. 960.]
Mr. Timms: We are considering how to bring about the change that I described. It is helpful that there is now clear, albeit rather belated, cross-party support for action, following the Conservative's change of position to supporting the principle that MPs and Members of the House of Lords should be required to pay tax in full on their overseas income, gains and assets. We are considering in detail how to do so and what the right legislative vehicle is. After we resolve those issues, the answer to the hon. Gentleman's question will be clear.
Two amendments to the Constitutional Reform and Governance Bill were tabled in December with the aim of achieving our objective. We support and sympathise with the principle behind the amendments, but the drafting needed some attention-for example, to cover inheritance tax as well as income tax and capital gains tax, which are dealt with by the remittance basis. We will introduce measures during this Parliament to ensure that parliamentarians cannot avoid UK tax on offshore income, gains and assets. I hope that the hon. Gentleman will welcome that commitment. The detail will become clear as soon as the amendments are brought forward.
I welcome this debate. It is an important contribution to the Government's commitment to fairness in the tax treatment of non-domiciles. I hope that I have made clear the importance of the current non-domicile tax regime for the UK economy but, equally, I underline the fact that we are committed to ensuring that MPs and Members of the House of Lords pay tax on their worldwide income and gains, alongside the vast majority of the UK population.
Jeff Ennis (Barnsley, East and Mexborough) (Lab): I am grateful for the opportunity to raise the important matter of mobility scooters and pedestrian safety. Let me say from the outset that mobility scooters are great and that they enhance the quality of life of many of my elderly and disabled constituents. Indeed, my mother and mother-in-law, who are both in their 80s, have mobility scooters and benefit greatly from them.
As you know, Mr. Atkinson, my constituency has the highest number of claims in the country from former miners for chronic bronchitis and emphysema. That means that it contains more people who are disabled than the national average, particularly in the former pit villages. However, my main reason for calling this debate was not that, but an e-mail I received from Kerry McNair, who is from Shafton in my constituency:
"Hello. I was advised to contact you regarding my daughter. She is 23 months old and was recently run down in Doncaster by a mobility scooter. We were in the pedestrian zone when I was struck from behind, then watched in horror as my little girl was knocked to the ground and driven over. The old lady did not stop, she kept going, dragging my baby under her machine. I screamed at her to stop. Eventually some men lifted her off, she refused to dismount, and I grabbed my little girl. The old lady then tried to drive off but someone grabbed her keys. An ambulance was called and took us to hospital. The old lady was spoken to by police but allowed on her way. She did not apologise and has made no effort to be in touch. No charges can be brought against her as there are no laws covering mobility scooters. This is wrong. My daughter has had a patch of her Scalp ripped off, she is covered in cuts and bruises. At night she takes ages to go to sleep as is afraid to close her eyes. I struggle changing her nappy as she now hates being laid down. And she is terribly clingy. I have been diagnosed with post traumatic stress. Why can this lady be allowed to ruin our lives. I close my eyes and picture it all the time. Please help me to fight this. I want to take a stand. I will not allow my daughter to be treated like this by anyone. Justice needs to be done. Can you help. I would be grateful for your advice. Kind regards, Kerry McNair".
Mrs. McNair is right that there are no suitable laws covering mobility scooters. The death of a 90-year-old lady called Lillian Macey last September led to no action by the police. Since raising this issue, I have received many e-mails in support of Mrs. McNair's point from across the nation. I recently received a short e-mail from a constituent of my neighbouring MP, my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham). Jane Kaye from Barugh Green wrote:
"I have been reading in the Barnsley Chronicle about your concerns regarding mobility scooters. I'm pleased you are looking into this as we (myself and my husband) have witnessed some near misses and scooters being driven at a worrying speed round streets in town where young children are walking."
For the rest of my speech I will investigate possible solutions, which the Minister can consider, to make mobility scooters as safe as possible for their users and other members of the public. I would like him to consider an e-mail from Mr. Michael Rushton from Wombwell in my constituency:
"Dear Jeff Ennis,
I'm glad to hear at last on the local radio station someone's taking up the problem of Motability Scooters. My son was nearly crushed against a wall a couple of years ago. Let me tell you the motability scooters weigh quite a bit. There are 2 or 3 questions that come to mind.
1. Why are motability scooter owners not made to take a test, such as a proficiency test that the suppliers could enforce?
2. Why are scooter owners seemingly exempt from prosecution for dangerous driving? For example, driving straight down the white line or going straight across at junctions while traffic is turning in to it, which I have witnessed dozens of times at Main Street in Wombwell.
3. Why are the owners also not penalised for carrying passengers?
4. Why are motability owners not breathalysed when they have been drinking in pubs and clubs? Surely this is drink driving. If riding a bicycle, they would be stopped for drink driving.
I understand the need for the scooters as I have a child with cerebral palsy and can appreciate the need for mobility, but safety for pedestrians and also the mobility scooter user must be paramount. The story on the radio must be repeated up and down the country."
As the Minister knows, there is no requirement for people to undergo training before taking a mobility scooter on to the streets. Many reputable retailers provide rudimentary instruction, but whether they do so is at their discretion. More people are now buying mobility scooters over the internet and second-hand ones through local newspapers, so the first time many mobility scooter users sit on their scooter is the day on which they take it out on to the streets.
The crux of the problem is how we can ensure that mobility scooter users are proficient at riding their machines and are safe for themselves and other road users. I do not believe that the answer is a compulsory test for mobility scooter users like a driving test. That would be using a sledgehammer to crack a nut. However, serious consideration should be given to allowing users the opportunity to take a proficiency test on a voluntary basis, along the lines of the scheme recently trialled by Norfolk police in Great Yarmouth. The impetus for that scheme was generated by the high volume of complaints about accidents caused by mobility scooter users on Great Yarmouth's streets and pavements.
"Anyone can get a mobility scooter and you don't have to have a licence...There's no test involved. There's no legal requirement to have insurance and anybody can drive one with no training at all."
"The courses, there have been two of them so far, aim to fill that gap. Improving users' handling skills and creating an awareness of road safety are all key, as is installing a sense of pavement etiquette.
It takes about 25 minutes to complete, but there is no pass or fail. So far more than 50 people have volunteered to do it. And it is not just for beginners. The majority are people who have been using their scooters for years.
Shiela Adair, 64, is one of them. 'Even though I've used a scooter before the course was ideal to learn about reversing.'"
Norfolk police started the scheme because it believed that the number of accidents involving mobility scooters was on the increase. That cannot be proved nationally because mobility scooters come under the Department's "other motorised vehicles" category, which includes ambulances, fire engines, motor caravans, motorised wheelchairs and quad bikes. Over the last three years, the number of accidents involving all vehicles in that category has increased substantially. For example, there were 1,970 accidents in 2006, 2,971 accidents in 2007
and 3,238 in 2008, which is the last year for which statistics are available. Those figures show a 60-odd per cent. increase over three years in that category. However, we cannot say how many of those accidents are directly attributable to mobility scooters. The Minister should therefore consider creating a separate category for mobility scooters, so that we can build up an evidence base on this important issue and find out one way or the other whether accidents involving mobility scooters are on the increase.
My final point regards a matter I have recently written about to the Chairman of the Transport Committee, my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman). I asked her whether her Select Committee would consider the issue and I am pleased to say-this is for the Minister's information-that in the coming months she has indeed agreed to carry out a short inquiry into the issue of mobility scooters. I obviously hope that the Minister will give evidence to that inquiry.
In conclusion I shall cover three key points, which I would like the Minister specifically to address in his closing remarks. First, will he consider the merits of introducing a voluntary proficiency test, preferably at no charge to the user? Such a test could be administered in conjunction with reputable retailers and local police authorities working together, as is done in Norfolk and one or two other police authority areas. I certainly intend to write to the chief constable of South Yorkshire to draw the matter to his attention, and to see whether we can establish a course similar to the Norfolk one in South Yorkshire. I hope that the Minister will talk to his counterpart in the Home Office, the Minister for Policing, Crime and Counter-Terrorism, on the matter to establish whether progress on such a course can be made.
The second issue I would like the Minister to address is whether he will consider introducing the new offence of riding a mobility scooter in a dangerous way. That was very much the point that Mrs. McNair made in her revealing e-mail, which I read out at the beginning of my contribution. Finally, will the Minister consider introducing the specific category of "mobility scooter" in relation to the departmental statistics issue that I have already outlined, so that we can definitely say whether this is an increasing problem?
Mr. Peter Atkinson (in the Chair): Order. Before I call the hon. Gentleman, I know that the hon. Member for Barnsley, East and Mexborough (Jeff Ennis) is happy for him to contribute, but may I confirm whether the Minister is happy?
|Next Section||Index||Home Page|