Oral Answers to Questions

Debate between David Gauke and Nigel Evans

Tuesday 27th January 2015 Commons Chamber

[Mr Gauke]

We have looked at that, but there is a significant cost involved in making the changes. On the point of helping tourism, the hon. Lady will be aware of the substantial increase in Northern Ireland and other places over recent years and, secondly, the coastal communities fund provides a lot of support to many of the areas that benefit from tourism.

[Mr Nigel Evans (Ribble Valley) (Con)]

Cutting beer taxes, raising income tax thresholds and stopping the petrol tax increases proposed by the Labour Government have helped the Evans household and, probably, a number of other household budgets throughout my constituency. In the next Budget, will the Chancellor please keep calm and carry on cutting taxes?

Finance Bill

Debate between David Gauke and Nigel Evans

Tuesday 3rd July 2012 Commons Chamber

[Mr Gauke]

I beg to move, That the Bill be now read the Third time.

The Bill proposes wide-ranging reforms of the tax system to reward work and promote growth. It supports business and growth, creates a fairer, more efficient and simpler tax system, and builds on our commitment to improving the tax policy-making approach. However, it should be seen against the fiscal backdrop that we inherited.

Before I discuss the Bill in more detail, let me remind Members of the challenges that we face. When we came to power, we were confronted by the largest peacetime deficit that the country had ever seen. One pound in every four was borrowed. Members will recall—[Interruption.]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I am finding it rather difficult to hear the Minister.

[Mr Gauke]

Members will recall that the independent Office for Budget Responsibility revealed that the underlying damage to the economy and our challenge in repairing it was much greater than anyone had thought. It was therefore vital for us to take decisive action to restore the economic stability that was needed for recovery, and the Bill is part of that. In order to address the enormous debts that we inherited, confront Britain’s problems and get the economy moving, the Government have undertaken a sustained programme of deficit reduction.

As I said earlier, the Bill supports business and growth. It implements milestones for the corporation tax roadmap, overhauls the controlled foreign companies regime, and introduces the patent box.

Finance (No. 3) Bill

Debate between David Gauke and Nigel Evans

Tuesday 5th July 2011 Commons Chamber

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

I beg to move amendment 1, page 48, line 16, leave out subsection (4).

[Mr Deputy Speaker (Mr Nigel Evans)]

With this it will be convenient to discuss Government amendments 2 to 8.

[Mr Gauke]

Clause 87 and schedule 25 give effect to the new mutual assistance recovery directive, which comes into effect on 1 January 2012. The directive will improve the current mutual assistance provisions, which permit member states to recover and enforce tax debts and to exchange information across the European Union. This will improve tax compliance and make the tax system fairer. The directive extends mutual assistance to all national and local taxes. Local taxes are devolved, so consent is required from the Scottish Parliament and the Northern Ireland Assembly to legislate on their behalf. These consents could not be secured before those Administrations dissolved ahead of the May elections, so a number of exclusions were included in the Bill published on 31 March 2011. Agreement has now been received from Scotland and Northern Ireland that Westminster can legislate for these matters.

The amendments remove the exclusions included in the Bill in relation to Scotland and Northern Ireland. They also make an addition to the explanation of “relevant UK authority” in order to include a claim from another member state to recover an agricultural levy in Scotland.

--- Later in debate ---

[Mr Gauke]

I beg to move amendment 22, page 166, leave out line 18 and insert

‘day specified in the election as the day on which it takes effect (which must be later than the day on which the election is made).’.

[Mr Deputy Speaker (Mr Nigel Evans)]

With this it will be convenient to discuss Government amendments 23 to 29.

[Mr Gauke]

The amendments will ensure that clauses 34 and 48 operate as intended when companies make retrospective changes to the dates to which their accounts are drawn up.

Schedule 7 allows companies to elect prospectively to change the currency in which they prepare their accounts for tax purposes. That is often referred to as their functional currency. That change must be prospective to prevent companies from changing their functional currency with the benefit of hindsight to realise a foreign exchange loss for tax purposes. Following the Public Bill Committee debate on clause 34, a major accountancy firm disclosed an avoidance scheme that retrospectively creates a short accounting period to circumvent the new rules. The amendments will ensure that clause 34 operates as intended when a company retrospectively changes the date to which its accounts are drawn up.

Clause 48 and schedule 13 implement an optional branch exemption regime. Companies must elect into branch exemption in advance of an accounting period to prevent them from leaving known losses outside of exemption in order to retain loss relief. Retrospective accounting period changes create problems similar to those that arise in connection with clause 34, whereby decisions on election into branch exemption may be made with the benefit of hindsight. The amendments will ensure that clause 48 operates as intended when a company changes its accounting periods. In each case, the date on which an election comes into force will be fixed in advance at the time when the election is made.

The amendments that relate to clause 34 will protect the £60 million yield in the original measure, and together the amendments will protect an estimated £200 million that would otherwise be likely to be lost due to avoidance schemes. They will ensure that clauses 34 and 48 operate as intended when a company uses hindsight to alter its accounting periods. I therefore urge the House to accept them.