Finance (No. 3) Bill (Third sitting)

Alex Sobel Excerpts

Thursday 29th November 2018 Public Bill Committees

[Mel Stride]

The provisions of the clause change the regime such that they will be required to account for the capital gains within 30 days. In a sense, this has been done by changing the rules rather than providing an incentive, I am afraid. I thank my hon. Friend for his interesting interventions.

Amendment 31 proposes that the changes come into effect only once we can guarantee awareness of them. HMRC has engaged with stakeholders on the details of the change and the draft legislation. The Members who tabled the amendment will be pleased to know that the Government published a summary of responses to their consultation on 6 July.

Amendments 32 and 33 request a review of the revenue impact of the changes, including the impact on the tax gap. The latest estimates for the revenue impact of the measure, both with the original 2019 start date and the delay to April 2020, were published at the Budget 2018.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

The transition from diesel and petrol to electric cars is vital for us to meet our carbon budgets. Has the Treasury assessed the impact of the measure on the electric vehicle market, as well as the wider automotive sector?

[Mel Stride]

I assure the hon. Gentleman that in these tax matters—as with all tax matters—given our firm commitment to honour our climate change commitments, we are in regular contact with car manufacturers and those producing electric vehicles, through my hon. Friend the Exchequer Secretary.

As with all policy changes, the fiscal impact of the measure will be monitored by HMRC, and the Office for Budget Responsibility may request for it to be reviewed as the new out-turned data becomes available. The fiscal impact on taxpayer compliance has been considered and is included in the overall costing of the measure. HMRC publishes annual updates to its tax gap analysis, which will reflect the effect of capital gains tax policy changes. I therefore urge the Committee to resist the amendments and I commend the clause and schedule to the Committee.