Tax Avoidance (HSBC)

Debate between David Gauke and Frank Dobson

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

On multinational companies, I would make three points. First, we are ensuring that HMRC’s large business unit has sufficient resources to monitor large businesses adequately. Secondly, we are leading on international reform through the base erosion and profit shifting project with the OECD. Thirdly, I would highlight the diverted profits tax measure announced at the last autumn statement, which has been consulted on in recent weeks, and for which we hope to legislate in the Finance Bill before the end of the Parliament.

[Frank Dobson (Holborn and St Pancras) (Lab)]

The public cannot understand why the names of these self-confessed tax swindlers are remaining secret. Will the Government publish the list of those with whom HMRC has come to an agreement, so that the public can see it and we can check it against the list of donors to the Tory party?

[Mr Gauke]

HMRC is essentially performing the same process that has been undertaken for many years, including when the right hon. Gentleman’s party was in office. It is consistent, for example, with the Liechtenstein disclosure facility, which was agreed by the previous Government, the point being that it is the most effective way of getting the tax, the interest and the penalty; of getting the money into the Exchequer; and of changing behaviour. I make no apology for HMRC pursuing that route as the first line, because it has proven to be effective.

Finance Bill

Debate between David Gauke and Frank Dobson

Tuesday 1st July 2014 Commons Chamber

[Frank Dobson]

No, I will not give way—[Interruption.] Well, I have sat here throughout the whole debate and listened to what other people had to say, so I am going to get a little further in.

One thing that is particularly irksome for badly off people in this country is hearing apologists for the City talking about bankers’ compensation packages—compensation apparently for the horrid requirement that they turn up at work. The dictionary definition of compensation is,

“recompense for loss, suffering or injury”.

Those bankers—how they suffer when they are helping people to swindle their tax liabilities; laundering money for gun runners or drug runners; or fiddling money to help people evade sanctions and then having to pay up. We clearly need to ensure that those rich people pay more tax, and the only way to do that is by increasing the rate to at least 50p.

[Mr Gauke]

It is always a great pleasure to follow the right hon. Member for Holborn and St Pancras (Frank Dobson). He suggested that the motto of the Treasury was “Ignorance is strength”. If that is the case, let me say that his was a very strong speech.

New clause 14 calls for the Chancellor to—

[Frank Dobson]

Will the Minister give way?

[Mr Gauke]

I think I should.

[Frank Dobson]

Can the Minister identify anything I said that was factually incorrect? [Interruption.]

[Mr Gauke]

Someone says most of it, but in the time available, I ought to turn to the new clause.

The new clause calls for the Chancellor to publish a report within three months of passing the Act to set out the impact of setting the additional rate at 50% for the tax year 2015-16. In addition, it asks for an assessment of the impact of reducing the additional rate to 45% for 2013-14 on the amount of income tax paid by those with a taxable income of more than £250,000 a year and those with a taxable income of more than £1 million a year, as well as on all those who are liable for the additional rate. It also proposes that the report set out the impact of reducing the additional rate on the level of bonuses awarded in April 2013 to employees in the financial sector. I hope that there will be no controversy when I say that, in order to be credible, any such analysis would need to take into account behavioural impacts, as did the HMRC report on the additional rate that was published at Budget 2012. It is clearly inadequate to look simply at theoretical income tax liabilities when increasing taxes.

Let me use this opportunity to assure hon. Members once more that the Government already consider the impact of any policy decisions taken. The HMRC report on the additional rate concluded that the underlying yield from the introduction of the 50p rate was much lower than originally forecast, due to large behavioural effects.

Finance (No. 4) Bill

Debate between David Gauke and Frank Dobson

Wednesday 18th April 2012 Commons Chamber

[Frank Dobson (Holborn and St Pancras) (Lab)]

As the chair of the all-party parliamentary group on historic places of worship, I have been approached by people from all over the country and asked to come out against the proposal to take away the zero VAT rating on alterations to listed places of worship. Such alterations include improved access for the disabled, the installation of toilets and small kitchens, the provision of better heating and lighting and the introduction of more energy-efficient measures. They are not just for the congregation; they are for the whole community. They encourage the community use of religious buildings and make an increasing contribution to attracting tourists all over the country. These church buildings are vital, whether they be vast edifices like York Minster, of which as a York lad I am immensely proud, or small parish churches all over the country. The Government need to look again at this silly, stupid, unprecedented and unconsulted-on proposal.

[Mr Gauke]

We have had a thoughtful and impassioned debate this evening, and I am pleased to have the opportunity to set out the Government’s case for addressing some of the anomalies within the VAT system. In the time available, I will try to address as many points as possible, but I hope the Committee will forgive me if I do not take many interventions, so that I can cover as much ground as possible.

Let me begin with hot takeaway food. The current rules on the VATability of such food have been made complex and unfair by a patchwork of different legal decisions taken over the decades. The definition of hot takeaway food has been in place since 1984, and it applies to food that

“has been heated for the purposes of enabling it to be consumed at a temperature above ambient air temperature”

and that is

“above that temperature at the time it is provided to the customer”.

There have been repeated efforts since the 1980s, however, to chip away at this boundary. A number of businesses have argued in litigation that although the food they may provide to their customers is hot and is taken away, it should not be taxed as hot takeaway food, but should instead be zero-rated. Some have argued successfully that their intention was not to provide their customers with food to be eaten hot, but that they heated their food for other reasons instead—for hygiene reasons, or to finish the cooking process, or to provide evidence of freshness, or to create an aroma or to improve appearance, crispiness or texture.