(6 years, 10 months ago)
Commons ChamberI beg to move amendment 13, page 22, line 21, leave out
“on or after 6 April 2017”
and insert
“on or after the date on which the Chancellor of the Exchequer lays before the House of Commons a report of the review undertaken under section 809VP of ITA 2007”.
This amendment would provide that the changes in Clause 15 do not have effect until after the Chancellor of the Exchequer has laid before the House of Commons the review provided for in NC3.
With this it will be convenient to discuss the following:
Clause stand part.
New clause 1—Review of conditions under which business investment relief is available—
‘(1) Chapter A1 of Part 14 of ITA 2007 (remittance basis) is amended as follows.
(2) After section 809VO (investments made from mixed funds), insert—
“809VP Review of conditions under which business investment relief is available
(1) Within six months of the coming into force of section 15 of the Finance (No. 2) Act 2017, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review of the conditions under which business investment relief is available.
(2) For the purposes of this section “the conditions” means—
(a) Condition A as defined in section 809VD,
(b) Condition B as defined in section 809VF.
(3) The review shall make an estimate of the value of the reliefs granted as a result of the conditions in respect of each tax year for which the relief has been available.
(4) The review shall make an estimate of the change in the value of the reliefs granted as a result of—
(a) changes to the conditions relating to eligible hybrid companies,
(b) changes to the periods specified in sections 809VD and 809VH,
(c) changes to the grace period in section 809VJ.
(5) The review shall make an assessment of the effectiveness of the conditions in relation to the stated policy aims of the Government in relation to business investment relief.
(6) The review shall prepare an analysis of the characteristics of beneficiaries of reliefs having particular regard to—
(a) income distribution,
(b) gender and other protected characteristics under the Equality Act 2010,
(c) domicile (including deemed domicile).
(7) A report of the review under this section shall be laid before the House of Commons within one calendar month of its completion.””.
This new clause requires HMRC to carry out a review of the conditions under which business investment relief is available, including estimates of the value of the reliefs (before and after the changes proposed in this Bill) and an analysis of the characteristics of those using the relief, including their domicile status.
New clause 3—Review of the efficacy of the conditions for business investment relief—
‘(1) Chapter A1 of Part 14 of ITA 2007 (remittance basis) is amended as follows.
(2) After section 809VO (investments made from mixed funds), insert—
“809VP Review of efficacy of the conditions for business investment relief
(1) Within two months of Royal Assent to the Finance (No. 2) Act 2017, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review of the impact of the conditions for business investment relief in encouraging investment in the UK.
(2) The review shall make an estimate of additional investment as a result of the condition for business investment relief—
(a) prior to Royal Assent being given to the Finance (No. 2) Act 2017, and
(b) if the changes to those conditions in section 15 of the Finance (No. 2) Act were brought into force.
(3) The Chancellor of the Exchequer shall lay the report of this review before the House of Commons.””.
This new clause requires HMRC to carry out a review of efficacy of the conditions under which business investment relief is available and the Chancellor to lay it before the House of Commons.
I appreciate having the opportunity to speak in this second part of our debate on the Finance Bill.
The matter in hand now has been discussed a number of times over the past few months, specifically around business investment relief. Some aspects of it were discussed while tackling the Ways and Means resolutions and on Second Reading. We are still not clear what impact this will have; the Government have still not told us. An overview of tax legislation was produced at the tail end of last year, when the Bill was first in draft form. It said there was likely to be a negligible impact on the public finances, but that does not explain what is actually going to happen. It also says that between 200 and 400 individuals a year benefit from business investment relief, but again that does not really explain the impact of this relief.
We do know, however, that everybody who benefits from the relief is a non-dom. The Government claim that they are changing the way non-doms are considered and are making it less easy for them to get away with dodging taxes, but this serves to increase the ability of non-doms to get away with not paying tax. The Government suggest this is about increasing investment, but they have not been able to produce any evidence of how much investment has been created as a result of business investment relief.
I am concerned about the amount of time and energy that the House is spending on this matter. It is spending a significant amount of time: we put this measure in place, presumably, at some point in the past few years, yet only 200 to 400 individuals have taken it up. Despite the fact that the numbers are so small, however, we are again debating the matter; this is the third time that we have done so this year, when there are many very important other items on the agenda.