Finance (No.2) Bill (First sitting)

Alison Thewliss Excerpts

Thursday 22nd April 2021 Public Bill Committees

[The Chair]

Copies of written evidence that the Committee receives will be available on the Bill pages of the parliamentary website.

We will now begin our line-by-line consideration of the Bill. The selection and grouping list for today’s sittings is available in the room. The list shows how the selected amendments have been grouped for debate, and the order of debates. Decisions on each amendment are taken when we come to the clause or schedule to which the amendment relates.

Clause 15

Extension of temporary increase in annual investment allowance

[Alison Thewliss (Glasgow Central) (SNP)]

I beg to move amendment 15, in clause 15, page 9, line 16, at end insert—

“(3) In paragraph 2(3) of Schedule 13 of that Act—

(a) after ‘second straddling period is’ insert ‘the greater of (a)’ and

(b) after ‘of that sub-paragraph’ add ‘and (b) the amount (if any) by which the maximum allowance under section 51A of CAA 2001 had there been no temporary increase in the allowance exceeds the annual investment allowance qualifying expenditure incurred before 1 January 2022.’”

This amendment would amend the transitional provisions for the reversion of the AIA to £200,000 on 1 January 2022, to ensure that smaller businesses with lower levels of qualifying capital expenditure are not disadvantaged by having their effective AIA limit restricted to significantly less than £200,000 for a period.

[The Chair]

With this it will be convenient to discuss clause stand part.

[Alison Thewliss]

It is a pleasure to see you in the Chair, Sir Gary. This is a small technical amendment, on which we have received a representation from the Association of Taxation Technicians. Clause 15 extends the availability of the temporarily increased level of the annual investment allowance for a further year, to 31 December 2021. Although we appreciate that the maintenance of a high AIA will be broadly welcomed by eligible businesses, the wider picture has been, as I said on Second Reading, that the chopping and changing of AIA levels is unhelpful, as it adds complexity to the system and creates traps that can disadvantage some businesses.

Specifically, the transitional rules that apply when the AIA level reverts to £200,000 on 1 January 2022 could result in businesses having their effective AIA limit restricted to significantly less than £200,000 for a period. The businesses most likely to be hit by that are the businesses least likely to be able to benefit from the temporary increase in the AIA limit. There is an opportunity to amend the transitional provisions in order to ensure that smaller businesses with lower levels of qualifying capital expenditure are not actually disadvantaged by a temporary increase from which they will not benefit at all. I hope that the Minister will consider this amendment.

[The Financial Secretary to the Treasury (Jesse Norman)]

What a pleasure it is to serve under your chairmanship, Sir Gary. I look forward to many happy hours of digestion and deliberation on the Finance Bill in Public Bill Committee.

Clause 15 temporarily extends, as the hon. Member for Glasgow Central mentioned, the increased annual investment allowance of £1 million until 31 December 2021. If I may, I will give some background and then address the amendment.

The annual investment allowance, or AIA, provides businesses with an up-front incentive to invest. It allows them 100% same-year tax relief on qualifying plant and machinery investments, up to an annual limit, and simplifies tax for many taxpayers. The summer Budget of 2015 set the permanent level of AIA at £200,000 from 1 January 2016. At Budget 2018, the level was temporarily increased to £1 million for two years, from 1 January 2019. The measure that will be enacted by this clause was announced in November 2020. The changes made by clause 15 will apply across the UK. The £1 million AIA cap covers the plant and machinery expenditures of more than 99% of all businesses.

There were a forecasted 24.9 million AIA claims in 2019-20, compared with 18 million when the cap was last at its £200,000 limit. The higher AIA cap provides businesses with more up-front support, encourages them to bring forward investment and makes tax simpler for any business investing between £200,000 and £1 million. Extending the AIA cap to £1 million supports business confidence at a time when covid-related economic shocks have severely dampened business investment. It is interesting that Chris Sanger, head of tax policy at EY, said that this measure

“will be particularly helpful for UK manufacturing at a time when, thanks to the announcement of a vaccine, business confidence is returning.”

Amendment 15, tabled by Opposition Members, seeks to change long-standing arrangements that manage the transition from one level of AIA to another. It is important to note that the current arrangements have been used by the Finance Acts of 2011, 2014 and 2019. They are familiar and well understood, and any change would create additional cost for businesses.

The change proposed would also give a benefit to a small subset of firms that have a chargeable period that straddles the date at which the AIA reduces to £200,000. However, those firms also received a benefit at the point of transition to the new £1 million level of the AIA, and therefore the amendment would not, in our judgment, be fair. It also risks encouraging some businesses to delay investment, which many would not think is in the public interest at present. I therefore urge the Committee to reject the amendment.

Overall, the clause and the measure it will constitute were warmly received by businesses at the end of last year as part of the Government’s desire to support business during the pandemic.

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[Alison Thewliss]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Clause 16

Meaning of “general decommissioning expenditure”

Question proposed, That the clause stand part of the Bill.

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

It is a pleasure to serve under your chairmanship, Sir Gary. The clause makes changes to ensure that decommissioning expenditure incurred by oil and gas companies in anticipation of the approval of an abandonment programme, a condition imposed by the Secretary of State or an agreement made with the Secretary of State qualifies for decommissioning tax relief.

Companies operating oilfields in the UK and the UK continental shelf have always been required to decommission the wells and infrastructure at the end of a field’s life. The tax relief for decommissioning expenditure is an important part of the UK’s overall oil and gas fiscal regime, which is balanced to maximise economic recovery of the nation’s national resources while ensuring that the nation receives a fair return for those natural resources. The changes made by the clause will clarify that appropriate expenditure on decommissioning incurred in anticipation of the approval of an abandonment programme, a condition imposed by the Secretary of State or an agreement made with the Secretary of State qualifies for decommissioning tax relief.

The clause does not have any Exchequer costs and does not alter the original policy intent of decommissioning tax relief. It will provide certainty for the UK oil and gas sector, which supports approximately 260,000 jobs, around 40% of which are in Scotland, and which has paid approximately £350 billion in production taxes to date. The clause will provide certainty that all appropriate decommissioning expenditure qualifies for decommissioning tax relief.

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[Jesse Norman]

I thank the hon. Member for Ealing North for his remarks in support of the previous clause. Clause 18 and schedule 2 make changes to the loss relief rules for businesses by extending the loss carry-back rule from one year to three years for corporation tax and income tax. The change will provide previously profitable businesses that have been forced into loss with extra flexibility to carry back up to £2 million of losses against historical profits and achieve an additional tax refund to help them to continue trading through this difficult period. I note that the measure has been welcomed by both the Institute for Fiscal Studies and the Chartered Institute of Taxation.

In the 2021 Budget, the Government announced that they would increase the flexibility of the UK’s loss regime in order to provide additional cash-flow support to businesses. Currently, a business that incurs a trading loss over the course of its accounting period is able to carry that loss back to be relieved against taxable profits in the previous year. There is no limit on the value of losses that may be carried back to reduce last year’s profit. That is in addition to businesses’ ability to use losses to offset in-year profit or to carry forward against future years’ profit. We are temporarily extending that one-year loss carry-back rule to three years to support business cash flow, giving businesses greater flexibility to monetise their losses sooner, rather than carrying them forward to offset against profit in future years.

The changes made by clause 18 and schedule 2 will extend the loss carry-back facility from one year to three years. Unincorporated businesses will be able to carry back up to £2 million in trading losses incurred in each of the tax years 2020-21 and 2021-22. Incorporated businesses can carry up to the same amount of losses incurred in accounting periods ending in each of the financial years 2020 and 2021. HMRC expects around 130,000 companies to be in a position to take advantage of the policy and to receive additional relief for their trading losses. It is also expected that over 99% of claimant businesses will be unaffected by the overall cap.

The clause and the schedule also include provisions to ensure that the cap is applied proportionately across businesses and groups. Groups will need to allocate the £2 million cap across their companies, but in order to maintain the simplicity for smaller businesses, companies intending to carry back less than £200,000 of losses will not be subject to this requirement, and nor will unincorporated businesses.

Amendment 2 seeks to amend section 127(3A) of the Income Tax Act 2007 to allow for the extended carry-back rule to apply to losses incurred in UK furnished holiday letting businesses. However, the relief granted in the Bill is an extension of relief for businesses that already qualify for loss carry-back relief. There is no intention to make loss carry-back relief in its current or extended form available to other businesses.

I recognise that there is currently an incorrect reference to UK furnished holiday lettings businesses in the Bill as introduced in the House. That was included because UK furnished holiday lettings businesses are treated as trades for the purpose of part 4 of the 2007 Act, which relates to loss relief. However, as those businesses are not entitled to make the necessary claim for the existing loss carry-back relief, they cannot claim the extended relief. I have therefore tabled amendment 16 to remove that reference, and thus make the Government’s intention clear. I therefore urge the hon. Member for Glasgow Central not to put amendment 2 to a vote.

New clause 10 would require the Government to review the impact of clause 18 on levels of tax avoidance, tax evasion and tax revenues. The Government publish information every year on the tax gap, including that part of it relating to tax avoidance and evasion. That kind of information is already in the public domain. The tax information and impact note for the measure before the Committee already indicates its expected effect on tax yields. I therefore do not believe that a review is necessary, and urge Members to reject the new clause.

The policy overall will support businesses by providing accelerated relief for losses in the form of a cash refund of tax paid when times were good, to help them to continue trading through this difficult period.

[Alison Thewliss]

Amendment 2 has the opposite aim, I suppose, to Government amendment 16. We proposed to update the Income Tax Act 2007 so that the extended loss carry-back rules in the Bill, in relation to furnished holiday lettings businesses, would have effect, whereas the Government clearly intend that the measure will no longer apply to those businesses.

In tabling our amendment we assumed that the Government had drafted their measure incorrectly and had accidentally excluded the people in question, but clearly we were wrong. They have not excluded them as much as they had hoped to, and are coming back to double down on that exclusion by means of amendment 16. Our technical amendment would help the sector, and we are keen for the Government to take it on board.

The Low Incomes Tax Reform Group has also raised the wider implications of clause 18 and the potential for unintended consequences and pitfalls resulting from the interaction between any tax refund and universal credit. Has the Minister given that any consideration? The group feels that there has been a significant increase in claims for universal credit during the pandemic—it is clearly evidenced—including from self-employed individuals and limited company directors who may never have needed to claim such support before the pandemic.

Under the universal credit legislation, self-employed income for a universal credit monthly assessment period is calculated by taking actual receipts in the assessment period and deducting any amounts allowed as expenses, tax, national insurance and any relievable pension contributions in that period. The group points out that receipts specifically include any refund or repayment of income tax, VAT or national insurance contributions related to a trade, profession or vocation, so any tax refund made as a result of the provision may therefore fall to be treated as income for universal credit purposes in the assessment period in which it is received, which in most cases will lead to a reduction of universal credit of 63p for every £1 of refund. In addition, further to that, if the refund is large enough, it might trigger the surplus earnings rules, meaning that any excess income in one assessment period can be carried forward and treated as income in the next assessment period, up to a maximum of six months.

It would be helpful if the Minister said whether the Government are aware of the issue and what plans they have to raise new universal credit claimants’ awareness of it, so that they can understand that if they receive the refund while they are in receipt of universal credit, they will need to report it as income for universal credit purposes. They will have to understand the implications fully.

This is an unintended issue arising from the pandemic. People who have never claimed universal credit before, who may have recourse to the provisions that the Government are making, will not understand how the two things interact. They might not have access to appropriate financial advice, and I would not want the Treasury or HMRC to be doing something on one hand that the Department for Work and Pensions did not understand on the other. What discussions has the Minister had with DWP Ministers, and what information does he intend to give out to people? As the Low Incomes Tax Reform Group points out, there could be implications that have not been considered.

[James Murray]

We note that clause 18 and schedule 2 provide a temporary extension to the carry-back trading losses provisions from one year to three years, for losses of up to £2 million for a 12-month period, both for companies and for unincorporated businesses. Those extensions to trade loss carry-back rules for both corporation and income tax have been introduced in response to covid-19 to help businesses that have suffered economic harm as a result of the restrictions placed on them.

We understand that the intention is to provide cash-flow benefit to affected businesses by providing additional relief for trading losses. As we have heard, the Chartered Institute of Taxation has said that it welcomes this measure for giving a cash injection to businesses with a track record of making profits and paying tax, but which have suffered during the pandemic. The Chartered Institute of Taxation points out that, in many cases, this measure will represent a cash-flow, rather than an absolute, cost to Government. The cost will reverse as the business, having used up its losses by carrying them back, makes profits and pays taxes sooner in the future.

Although we recognise the broad support for the measure from the Chartered Institute of Taxation and the wider importance of helping businesses with cash flow when they have suffered as a result of covid restrictions, we have tabled new clause 10, which relates to tax avoidance and evasion. We do not doubt that most businesses benefiting from the measure will do so legitimately. Given the importance of making sure public money is spent effectively and as intended, however, we believe the Government should identify any risk and take action to mitigate those risks as necessary.

Furthermore, we would also like to raise the issue identified by the Chartered Institute of Taxation’s Low Incomes Tax Reform Group—namely, the potential interaction of any tax refund with universal credit, as set out by the hon. Member for Glasgow Central. I would therefore like to reiterate her call to the Minister to ask whether he is aware of this issue. If so, what plans do the Government have to raise awareness of this issue with universal credit claimants to make sure they understand that, if the refund is received when they are in receipt of universal credit, they will need report this income for UC purposes?

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[Jesse Norman]

I thank the hon. Gentleman for his question and for his support for this important legislation. Although not related to this clause, I thank him for the support the Labour party has given on the issue of the loan charge. These are important ways to curb forms of abuse of the rules that may mean people do not pay appropriate levels of tax, so I am grateful for that support.

On the last point that the hon. Gentleman raised, I am afraid that it was an unfortunate and slightly misinformed debate in Committee of the whole House, in part because there was a suggestion that somehow clause 21 benefited only umbrella companies and should be struck out, and that the effect of striking it out would somehow mean that workers would receive agency rights by working through agencies’ payrolls. In fact, that is not correct. Clause 21 has no bearing on workers receiving rights, and it also ensures that the rules apply correctly to agencies, and indeed to a wider group, such as employees on secondment. The effect of the amendment proposed in Committee of the whole House would have been to gut the legislation, which is why the Government opposed it.

Question put and agreed to.

Clause 21 accordingly ordered to stand part of the Bill.

Clause 22

Payments on termination of employment

[Alison Thewliss]

I beg to move amendment 1, in clause 22, page 17, line 17, after “then” and before “ – ” insert

“where it is to the benefit of the employee the following calculation may be used”.

This amendment would ensure that, in new subsection 402D(6A) ITEPA03 to be inserted by FB clause 22(7), the method of calculating post-employment notice pay (PENP) for certain employees paid by equal monthly instalments whose post-employment notice period is not a whole number of months continues to be an alternative method that can be used if it benefits the employee, rather than being compulsory.

[The Chair]

With this it will be convenient to discuss clause stand part.

[Alison Thewliss]

This technical amendment would ensure that, in new subsection 402D(6A) of the Income Tax (Earnings and Pensions) Act 2003, which is to be inserted by clause 22(7), the method of calculating post-employment notice pay for certain employees paid by equal monthly instalments whose post-employment notice period is not a whole number of months continues to be an alternative method that can be used if it benefits the employee, rather than being compulsory.

In common with the Institute of Chartered Accountants in England and Wales, we feel that the provisions do not match the intended policy. The institute has recommended that clause 22(7)(c), which inserts new subsection 402D(6A) into the Income Tax (Earnings and Pensions) Act 2003—I will be sending my notes to the Hansard people, given all the figures and facts—needs to make it clear that the method set out for calculating post-employment notice pay is an alternative that can be used, rather than something that must be used. That would make the legislation on termination payments align with the policy intent stated in the Bill’s explanatory notes, the “Notes on the Finance Bill resolutions 2021”, and HMRC’s existing guidance.

Clause 22 amends the income treatment of termination payments. As explained in paragraph 11 of the explanatory notes, clause 22(7)(c) provides for the new subsection to be inserted into the Income Tax (Earnings and Pensions) Act 2003. The clause will apply to individuals who have their employment terminated and receive a termination payment on or after 6 April 2021. We understand that the Institute of Chartered Accountants in England and Wales has identified some technical difficulties with the proposals. It believes that the intention of legislating this point is to put into law the ability to choose to adopt the alternative method, which is in line with HMRC’s policy of enacting extra statutory concessions and other easements following the Wilkinson case. If enacted, however, the Finance Bill will make it compulsory, so we recommend our amendment, and we ask the Government to give greater consideration to it. It is a very technical and detailed amendment, as I have said already, but I urge the Minister, if he cannot accept it today, to bring it back at a later stage.

[James Murray]

As we know, clause 22 focuses on post-employment notice pay, which is the part of a termination payment that is treated as being a payment in respect of the employee’s notice period, and that is subject to income tax and to employees’ and employers’ national insurance contributions. The clause amends the income tax treatment of termination payments in two ways. First, it provides a new calculation for the post-employment notice pay for employees who are paid by equal monthly instalments and whose post-employment notice period is not a whole number of months. That will help avoid excessive tax charges, and we support it.

Secondly, the clause aligns the tax treatment of post-employment notice pay for individuals who are non-resident in the year of termination of their UK employment with the treatment for all UK residents. Currently, post-employment notice pay is not chargeable to UK tax if an employee is non-resident for the tax year in which their employment terminates. This measure will ensure that non-residents are charged tax and national insurance contributions on post-employment notice pay to the extent that they have worked in the UK during their notice period. The change affects only individuals who physically performed the duties of their employment in the UK. That non-residents should make tax contributions on post-employment notice pay for the time that they worked in the UK during their notice period is a fair change, so we support the measure.

[Jesse Norman]

I thank the hon. Members for Glasgow Central and for Ealing North. I do not think that we need to spend too long on this. Clause 22 makes changes to the taxation of termination payments. It was published in draft and announced in a ministerial statement in July 2020. The measure has been set out in the explanatory notes and in Opposition speeches, and I will not spend too much time on them now.

The clause alters the calculation used to define the amount of a termination payment that should be taxed as post-employment notice pay. This is when an unworked notice period is not in whole months but an individual is paid monthly. Secondly, as hon. Members mentioned, the clause brings post-employment notice pay paid to non-UK residents within the charge to UK tax. I am grateful for the support of the Labour Opposition on that.

In terms of the amendment, I am not surprised that the hon. Member for Glasgow Central slightly stuttered over what is a formidably technical matter, but I think we can digest the point very simply. There is currently no single way of calculating the payments. Amendment 1 seeks to make the calculation alternative rather than mandatory for the purposes of post-employment notice pay. I remind her and the Committee that the new calculation is more accurate for employees paid by equal monthly instalments, and that it is more straightforward for employers to administer a single mandatory calculation rather than having to choose between two alternative calculations. It is therefore just a better and more effective way of discharging the policy intent, and I urge her not to put the amendment to a vote.

[Alison Thewliss]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 ordered to stand part of the Bill.

Clause 23

Cash equivalent benefit of a zero-emissions van

Question proposed, That the clause stand part of the Bill.

[Kemi Badenoch]

Clause 23 makes changes to reduce the van benefit charge—the VBC—to zero for employees who are provided with a company van that produces zero carbon emissions. The van benefit charge applies where an employee is provided with a company van by their employer that they use privately, other than for ordinary home-to-work commuting.

At Budget 2014, the Government announced that the van benefit charge for zero-emission vans would be a percentage of the flat-rate van benefit charge for conventionally fuelled vehicles until April 2020. Those changes were legislated for in the Finance Act 2015. At Budget 2015, the Government announced that the planned increases to the percentages for 2016-17 and 2017-18 would be deferred to 2018-19, and the percentages would increase by 20% for each subsequent tax year, rising to 100% in 2021-22. Those changes were legislated for in the Finance Act 2016.

The changes made by clause 23 will reduce the van benefit charge to zero from 6 April 2021 for all company vans that emit zero carbon emissions, giving those vehicles preferential tax treatment over conventionally fuelled vehicles. The Government announced the measure at Budget 2020 to incentivise the uptake of zero-emission vans and to help the UK to meet its legally binding climate change targets.

Transport is now the largest sector for domestic UK greenhouse gas emissions, and a significant proportion of that is accounted for by road transport. Moreover, vans tend to do more mileage and are more polluting than cars. By reducing the level of the tax charge that would otherwise be applicable, the change outlined in the clause will incentivise the uptake of zero-emission vans and support the Government’s environmental commitments.

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[Jesse Norman]

The clause makes changes to ensure that employees who receive certain long-term salary sacrifice benefits do not lose entitlement to a tax advantage if they begin to receive statutory parental bereavement pay.

The optional remuneration arrangement legislation introduced on 6 April 2017 largely removed the income tax and national insurance contributions advantages for most employment-related benefits provided through salary sacrifice schemes. Transitional rules for relevant long-term benefits allow the benefit valuation rules prior to the optional remuneration arrangement legislation to apply until 5 April 2021, provided that there is no variation in an employee’s employment contract. The relevant long-term benefits are employer-provided living accommodation, relevant school fees arrangements and certain employer-provided vehicles. Statutory payments are normally treated as a variation in contract, but those were specifically listed and disregarded in the 2017 optional remuneration arrangement legislation.

On 6 April 2020, a new statutory payment, statutory parental bereavement pay, was introduced under the Parental Bereavement (Leave and Pay) Act 2018. The payment is payable to employed parents or partners of a parent who loses a child, whether biological, adoptive or born to a surrogate, under the age of 18, or who suffers a stillbirth from 24 weeks. This statutory payment is not listed in the 2017 optional remuneration arrangement legislation as one that may be disregarded as a variation in contract, as it did not exist at the time.

Where an employee is in receipt of statutory parental bereavement pay, therefore, and one or more of the relevant long-term benefits through a salary sacrifice arrangement, the variation to employment conditions under the optional remuneration arrangement legislation meant that they would lose entitlement to the income tax and national insurance contribution advantages of receiving the benefit in that manner.

The clause therefore includes statutory parental bereavement pay as a statutory payment that will be disregarded under the 2017 optional remuneration arrangement legislation. The clause will disregard statutory parental bereavement pay as a variation in contract under the optional remuneration arrangement legislation, ensuring that employees in receipt of one of the long-term benefits and statutory parental bereavement pay will be subject to the original remuneration arrangement rules, which continue to provide a tax advantage until 5 April 2021.

New clause 2 would require the Government to publish a report on the impact of clause 27. The Treasury carefully considers the impact of individual measures announced at fiscal events. This clause legislates for a temporary retrospective measure to protect a small number of individuals who receive a transitional benefit under the optional remuneration arrangements and statutory parental bereavement pay from losing their tax advantage in 2020-21. The legislation ceased to apply from 6 April 2021, so the clause will have no further impact. I therefore urge the hon. Member for Glasgow Central not to press the new clause to a vote.

[Alison Thewliss]

We of course welcome all moves to support parents through the difficult time of bereavement. Our new clause would require the Secretary of State to publish reports on the uptake of statutory bereavement pay. It is important that we encourage people to take it up and that we let people know it is available to them. If the Government are not monitoring that, it is difficult to tell how effective the policy is.

Bereaved parents must be given the space and the time to grieve at a time of unimaginable tragedy. A lot will not know that they are entitled to this provision should the worst happen. We welcome the Government’s move to introduce a statutory requirement for people in the event of the death of a child, and we welcome the provisions more generally. Our aim is to increase the uptake of the payment and public knowledge of it.

In Scotland, we are certainly doing everything we can, within the constitutional and financial constraints placed on us, to support parents. We are increasing funeral support payments to reflect the cost of living. The 2020-21 Budget includes £1.3 million for funeral support payments in Scotland, increasing the standard rate from £700 to £1,000. The UK Government have not built the cost of inflation into their awards, but we will certainly be doing that for ours. It is important to take that cost into account when considering the whole package of support that can be delivered for bereaved parents.

Finally, my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) has been pushing for an increase in bereavement leave for everybody in all circumstances, particularly given this last year, during which things have been so difficult for so many people across the country. Many employers still do not give the bereavement leave that they should when people are in such circumstances. I urge the Government to consider expanding bereavement leave to everybody in all circumstances. While it is incredibly important for parents, it is important that everybody has the time, space and financial backing to grieve. Sadly, many people do not have that vital support.

[James Murray]

As we have heard, statutory parental bereavement pay was introduced in April 2020. The measure in clause 27 has been proposed to ensure that a payment will not be treated as a variation in contract for certain long-term salary sacrifice arrangements, so that recipients of such payments are not disadvantaged. The clause will bring statutory parental bereavement pay into line with other benefits.

Without the change, if a parent takes such leave, the time they have taken off will factor into the calculation of a salary sacrifice arrangement. In effect, taking statutory parental bereavement pay would lessen their entitlement to salary sacrifice arrangements.

Exemptions for other benefits exist, but they were made before the introduction of statutory parental bereavement pay, so the latter is not included. Clause 27 will include it, bringing it into line with other benefits. That is sensible, and Labour supports the clause.

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[James Murray]

We are pleased to support this important clause, which, as we have heard, introduces an income tax exemption for payments made to victims of modern slavery and human trafficking. As we also heard, the UK has an obligation under the Council of Europe convention on action against trafficking in human beings to assist victims of modern slavery and human trafficking in their physical, psychological and social recovery, including material assistance. The exemption from income tax will have effect from 1 April 2009, when financial support payments started. We welcome this measure, being wholly relieving and with retrospective effect, and are pleased to support its standing part of the Bill.

[Alison Thewliss]

I rise to support the clause; I think it is absolutely the right thing to do. May we have more information on how many people have received such payments since 2009? It would be useful to have a picture of how many people have benefited from this.

[Jesse Norman]

Of course, HMRC does not disclose information about individual taxpayers. It has not made any income tax deductions on payments already made to potential victims. I am not aware of whether it has the data, but I am happy to check and, if it does, I will respond to the hon. Lady.

Question put and agreed to.

Clause 35 accordingly ordered to stand part of the Bill.

Clause 37

Relief for losses etc

Question proposed, That the clause stand part of the Bill.