Finance (No. 3) Bill (Sixth sitting)

Bambos Charalambous Excerpts

Tuesday 4th December 2018 Public Bill Committees

[Mel Stride]

Clause 45 makes changes to improve the SDLT filing and payment process. In answer to the hon. Lady’s question about whether we will provide facilities on the site to pay simultaneously, we do not have plans to do so. That is because the online service cannot be combined with Bacs and CHAPS services at present.

The hon. Lady made a more general point about the mistakes that are made in filing. As she knows, we consulted on the information being sought as part of the process, and we will be applying various simplifications as a consequence, most notably around complex commercial lease arrangements. The information that we have hitherto sought in that respect will now no longer be sought. That simplification, and others, should be beneficial in cutting down the mistakes that the hon. Lady referred to.

Currently, the purchaser of land, or the purchaser’s agent, must make a stamp duty land tax return and pay tax due within 30 days of the effective date of the transaction—usually the completion date. The changes made by clause 45 will reduce the time allowed to make an SDLT return and pay the tax due from 30 days after the effective date of transaction to 14 days. That is in line with other initiatives in recent years that bring tax reporting and payment closer to the date of the transaction. The hon. Lady referred, I think, to clause 14 on capital gains tax, where a similar approach has been taken. This is in line with these other initiatives.

The measure will not change liabilities for the purchaser, but will lead to tax being paid earlier. The change applies to purchases of land situated in England and Northern Ireland where the effective date of the transaction is on or after 1 March 2019. This change will directly affect approximately 20,000 businesses, mainly agents, such as licensed conveyancers and solicitors. Each year, this will directly affect fewer than 500 individuals who file their own SDLT returns without using an agent. However, the impact on administrative burdens for businesses is expected to be negligible.

The Government announced the change at autumn statement 2015 and consulted on it, as the hon. Lady described, in 2016. The Government confirmed at autumn Budget 2017 that it would come into effect on 1 March. To help purchasers and agents to comply with the new time limit, HMRC has worked with key representative bodies to agree simplifications to the SDLT return, for example, by reducing the amount of information required. These improvements will be in place when the new time limit begins. The measure will result in a yield of £60 million in 2018-19—the year of implementation—and a small ongoing yield in future years.

Amendment 95 would require a report on any consultation undertaken on the provisions in this section.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

What steps has HMRC put in place to make sure that the 20,000 businesses that are going to be affected are properly informed of the change, and know that it is coming?

[Mel Stride]

HMRC will, as a matter of course, issue guidance on all major tax changes, and that will be available online. As part of the consultation, as I have outlined, a number of these organisations were consulted in detail, not just about the measures but to make sure that those businesses are ready and appropriately informed.

The amendment is not necessary. I can give the Committee the information it requires now, because it is already in the public domain. The Government published a document on 20 March 2017 in response to the consultation that we published in the autumn of 2016, and we published draft legislation in July 2018 for technical consultation. HMRC also held meetings with stakeholders, which included representative bodies from the property and conveyancing industries. Their views on the information required in the return are reflected in the changes being made to make compliance with the new time limit easier.

New clause 13 would require a review of the equality impact of clause 45. The new clause is not necessary either, because the Government set out in the tax information and impact note published on this change in July 2018. It is not anticipated that there will be any impact on groups with protected characteristics. Clause 45 does not change anyone’s SDLT liability; it just brings a requirement to file a return and pay the tax closer to the date of the transaction. For that reason, direct impacts on different types of households will be negligible, and the type of analysis required by the amendment would not be meaningful.

Regarding other regions of the UK, Land and Property Services in Northern Ireland—an agency of the Department of Finance of the Northern Ireland Executive—was consulted and is content with the measures. The changes will improve the SDLT filing and payment process, and I commend the clause to the Committee.

--- Later in debate ---

That evidence has to be considered in the context of the Government’s long-standing policy of alcohol duty cuts and freezes. The House of Commons Library describes that in some detail, which I will not go into, but it is well worth having a look at the report. Those cuts, it is worth noting, come at some expense during a time of austerity, and we cannot ignore the fact that they could further contribute to the concerning picture set out in the report by Public Health England. The Economic Secretary indicated that there was a requirement for evidence, but the evidence in this regard is resounding: a public health approach to alcohol duties will not only raise revenue for the Exchequer, but reduce the harm caused by alcohol in our society.

[Bambos Charalambous]

My hon. Friend is making an excellent and, shall I say, spirited speech. Does he agree that the Government have totally ignored the health effects of alcohol consumption in the way they have implemented alcohol duties?

[Peter Dowd]

It leads me to believe that the Government have not paid enough attention. That is why we want to have a look at it in the round and why we want a review. Let us see the evidence. If the evidence indicates my hon. Friend’s contention, as I think it will, we would need to do something.

Unfortunately, despite the move to begin to increase duties on wine and cider as set out in clauses 53 and 54, it seems that the Government’s policy on wider alcohol duties reflects continuation rather than a break with the last eight years. Will the Minister confirm that it remains the Government’s policy to increase only those alcohol duties included in the clause and to freeze all those not included? That being the case, does it not seem that the attempt in clause 54 to increase the price of mid-strength cider is a mere sticking plaster on the Government’s wider policy of ignoring the harm to the public’s health caused by cheap alcohol? In other words, when it comes to applying this approach across all duties, it seems that they bottled it. Could it be that they choose to grab a quick Budget headline once a year instead of taking an evidence-based approach to alcohol harm like that adopted by the last Labour Government?

I question the logic of creating an additional rate of duty to ciders up to only 7.5% alcohol by volume. A cursory look at the white cider market suggests that many of the products that the Government seek to make more expensive are currently listed at exactly 7.5% ABV, which is the upper band of the new duty applied by the clause. Clearly, while those ciders would be covered by the new band of duty, it would take only an additional spoonfull of sugar, as the saying goes, to push them up to 7.6% ABV, which is currently covered by the higher rate of duty that is applied to so-called high-strength ciders. Would it not have been a better approach for the Government simply to reduce the lower band of excise applied to higher-strength ciders to ensure that that duty instead applied from 6.9% ABV all the way up to 8.8% ABV? Will the Minister expand on what logic has been pursued by the Government and whether it might incentivise the industry to take more decisive action to reduce the strength of their white ciders or begin to diversify their products?

Amendment 97 would require the Chancellor of the Exchequer to review the impact of clause 54 on the cider industry. The point is to see how far the Government have tried to work with industry to develop and implement a more public health-oriented approach to their products while minimising the impact such an approach has on the industry.