8. MUTUAL ASSISTANCE FOR THE RECOVERY
OF CLAIMS (8089/00)
Letter from Lord Tordoff, Chairman of
the Committee, to Dawn Primarolo MP, Paymaster General, HM Treasury
Thank you for your letter of 15 July[1]
replying to mine of 22 and 29 June.
I do of course appreciate that the proposal
on mutual assistance for the recovery of claims is a single package,
which will be voted on in the Council of Ministers as a whole,
on a single legal base. What we have been trying to discover from
you is which elements of the proposal have caused the Government
to judge that the legal base must be one requiring unanimity.
In response to a previous query on this point,
you said (in your letter of 7 June) that the proposal "would
have a direct impact on taxpayers as well as affecting the level
of tax recovered within the Community and thus the revenues of
Member States", and could "affect the burdens and constraints
placed upon United Kingdom businesses or have a revenue effects
on the Exchequer". Our understanding of the proposal is that
it would not impose any new tax burdens, but simply ensure that
existing taxes were paid. Accordingly, in paragraph 212 of our
recent Report (Taxes in the EU: can co-ordination and competition
co-exist?)[2]
we have concluded:
"We hope that the Government will not feel
obliged to continue to block the proposal for improved mutual
assistance for the recovery of cross-border tax debts on the grounds
that it should be subject to unanimity not qualified majority
voting. It seems to us a useful administrative measure, which
could significantly improve recovery rates for indirect and direct
taxes, and it is a pity to lose the potential gains because of
a point of dogma. We could not understand how the proposal could
have an adverse effect on the revenue of the United Kingdom—and
if, as HM Customs and Excise suggest, "it would have a direct
impact on the taxpayer who is pursued for their debt in another
Member State", the Government is surely in favour of its
residents paying the taxes due from them wherever they occur".
We should appreciate a full response on this
point. In the meanwhile, we are continuing to hold the document
under scrutiny.
28 July 1999
Letter from Dawn Primarolo MP, Paymaster
General, HM Treasury, to Lord Tordoff, Chairman of the Committee
Thank you for your letter of 28 July concerning
the scrutiny of these documents. You asked which elements of the
proposal have caused the Government to judge that the legal base
must be one requiring unanimity.
As you are aware, this draft Directive proposes
revised arrangements for the recovery of tax and similar debts.
It contains provisions which state which debts are to be recovered,
when and how recovery shall take place and how costs shall be
recouped from the debtor and the requesting Member State. Many
of these arrangements (those requiring the recovery of debts even
when they are under appeal, for example) are very different both
from the existing arrangements for cross-border recovery of debts
and from the UK's procedures for the recovery of domestic tax
debts.
So, although the proposal would not impose any
new tax burdens on compliant taxpayers, it does propose substantive
changes in the arrangements relating to the recovery of tax, and
the Government is committed to the retention of the unanimous
vote on all tax matters. We have said that qualified majority
voting for tax is not something the UK will agree to. And on 19
October, in the debate on the Tampere Special European Council,
the Prime Minister made it clear that all EC tax matters should
remain subject to unanimity.
30 November 1999
Letter from Lord Tordoff, Chairman of
the Committee, to Dawn Primarolo MP, Paymaster General, HM Treasury
Thank you for your letter of 30 November, which
Sub-Committee A considered at its meeting on 14 December. We are
still not convinced that it is sensible to insist on unanimity
for this measure, but we see no point in prolonging the correspondence
further and we clear the document, which we have been holding
under scrutiny (8089/99).
I must, however, express my disappointment that
it took you four months to reply to my letter of 20 July. After
a long delay in replying to a previous letter on this subject,
you apologised for the oversight in not replying sooner, and said
(in you letter of 7 June) that you had taken steps to improve
co-ordination of Treasury, Customs and Inland Revenue leads for
which both Patricia Hewitt had responsibility. I am afraid that
the fruits of this co-ordination are not apparent. I should be
glad to know what caused the delay on this occasion, and I seek
your assurance that it will not recur in future.
15 December 1999
Letter from Dawn Primarolo MP, Paymaster
General, HM Treasury, to Lord Tordoff, Chairman of the Committee
Thank you for your letter of 15 December confirming
that the Select Committee on the European Communities has cleared
document 8089/99 which you had been holding under scrutiny.
You ask about the time it took to reply to your
letter of 28 July. In that letter you referred to, and quoted
from, the recently published House of Lords report Taxes in
the EU: can co-ordination and competition exist? In the circumstances
it seemed appropriate to consider your letter and the Report together,
and we took some time to give full and proper consideration to
both. I therefore replied to your letter in November, after the
Government's official response to your Report and the subsequent
debate on the subject in the House of Lords. That said, we should
have written to you in the meantime explaining why there would
be some delay before we could send you a substantive response,
and I am very sorry that we did not do so.
17 January 2000
1 Printed in Correspondence with Ministers, 17th
Report, Session 1998-99, HL Paper 94, p 66. Back
2
15th Report, Session 1998-99, HL Paper 92. Back
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