Public Appointees (Tax Arrangements)

Alan Campbell Excerpts

Wednesday 23rd May 2012 Commons Chamber

[Danny Alexander]

I am grateful to my hon. Friend for his comments and his welcome. He is right that the arrangements should be exceptional and unusual, and should apply only in particular cases, such as when there is a short-term shortage, as he says, or a particular specialism is needed to deliver a project. That is why so many of these cases relate to IT professionals delivering individual projects. There is an employee test under the IR35 rules, which I am told is simple and straightforward, and that should be sufficient for determining on which side of the line someone sits.

[Mr Alan Campbell (Tynemouth) (Lab)]

It is now clear that some of the worst cases take place in local authorities such as North Tyneside. Can the Chief Secretary not do more to direct HMRC not only to deal with these abuses, but to seek redress?

[Danny Alexander]

I am interested to hear that there are particularly egregious offenders in North Tyneside and am grateful to the hon. Gentleman for drawing that to the House’s attention. My right hon. Friend the Secretary of State for Communities and Local Government has of course drawn this process to the attention of all local authorities precisely to get them to show a transparency similar to that which we have shown with the review today, and I very much hope that they will all follow that example. It is for HMRC to decide whether it wishes to investigate an individual case and whether there is a case to answer. As I have said, the existence of these arrangements does not in itself demonstrate that tax avoidance is taking place, because it is perfectly possible for the arrangements to be in place and for the proper amount of tax to be paid. The problem is a lack of transparency, so getting people to publish the information so that HMRC can decide whether it wishes to investigate must be the right process to go through.