Written evidence submitted by HM Treasury
RESPONSE TO TREASURY COMMITTEE
Does HMRC have a policy on how to treat taxpayers
who cannot meet tax bills because of the administration of PMS?
HMRC takes a sympathetic approach to both individuals
and businesses having genuine short term difficulties in paying
the tax they owe. This applies just as much to those difficulties
which are associated with the administration of the Presbyterian
Mutual Society as it does to those whose difficulties arise from
any other cause.
There is clearly considerable complexity in
the position of those involved in PMS, deriving from the nature
of the society's status, the manner in which insolvency legislation
works and differences between compensation arrangements in NI
and the UK. However, their standing with regard to their tax liabilities
is the same as for anyone in temporary financial difficulties,
which is that HMRC is committed to working with those who contact
them about problems in making tax payments
Is Government considering the desirability of
a resolution/insolvency regime which takes account of the principles
on which mutual societies are based?
The Banking Act 2009 provides special resolution
and insolvency arrangements for all types of UK institution which
have a Financial Services and Markets Act (FSMA) permission to
accept deposits.
The Act includes provisions for extending the
Special Resolution Regime (SRR) stabilisation tools to building
societies, and adapting them to reflect the different legal framework
of building societies. The Act also includes a power to extend
the resolution and insolvency arrangements to credit unions in
the future, should this be considered appropriate.
When does the Treasury intend to bring forward
legislation on credit unions in Northern Ireland?
In advance of legislation to implement proposed
changes to current policy, it is required that appropriate consultation
must precede any legislative change.The Treasury and the Department
of Enterprise, Trade and Investment (DETI) in Northern Ireland,
are currently finalising a joint consultation document covering
the relevant issues in relation to credit unions in Northern Ireland.It
is intended that this will be published shortly.
However in the recent debate on amendments to
the Financial Services Bill, the view was expressed that since
all parties agreed that the proposed changes to the legislative
framework are in the best interests of all, the anticipated consultation
process appeared to be unnecessary. In response, the Economic
Secretary to the Treasury indicated that the Government would
consider bringing forward the legislative change were it to receive
a formal notification from the Northern Ireland Executive, clearly
backed by the Assembly, to the effect that it did not feel there
was a need to consult and if agreement could be reached with the
FSA on the level of detail needed to be enable the change to be
made with confidence that the other elements could be accommodated.
The Treasury is therefore currently investigating
urgently with both Northern Ireland and with the FSA how the changes
that all parties regard as urgent and essential can most effectively
be brought about.However, this course may present its own legal
challenges, as well as operational difficulties for the FSA, if
full and proper consideration is not focused on the timing of
implementation of appropriate legislation.
1 February 2010
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