Draft Income Tax (Trading and Other Income) Act 2005 (Amendments to Chapter 2A of Part 5) Regulations 2019

Debate between Jesse Norman and Neil Parish

Thursday 31st October 2019 General Committees

[Jesse Norman]

I am grateful to my hon. Friend for his intervention, which reflects his characteristically acute understanding of financial and tax issues. Of course, the question in many of these cases—I will not take one in particular—is whether companies have paid the appropriate level of corporation tax in the jurisdictions where corporate tax is chargeable. There is then the separate question whether they pay a fair level of tax in the jurisdictions where they do business. He will understand that the latter is very much in the Government’s mind. That is part of the purpose of our new digital services tax, which we hope to introduce in the next Finance Bill and for which legislation has already been published.

[Neil Parish (Tiverton and Honiton) (Con)]

This is probably completely out of order, in terms of considering the draft regulations, but I paid my Amazon bill the other day. Amazon is registered in Luxembourg and, obviously, pays much less tax; yet it does a hell of a lot of business here. I am sure that the draft regulations do not deal with that, but are we thinking about dealing with it in some way in the future?

[Jesse Norman]

I am not, as a Minister, privy to individual taxpayer relationships with HMRC, but I am certainly given to understand that it is looking very closely at the general question of whether platforms, and international corporations of other kinds, are paying appropriate levels of tax, as the hon. Gentleman would expect.

As I said, the draft regulations introduce an exemption for companies resident in specified territories. That exemption, which is subject to anti-avoidance conditions, will be used to ensure that ORIP does not apply to high-tax jurisdictions that do not have a full DTA with the UK. The regulations include a power to add and remove specified territories by making further secondary legislation. HMRC will consider exercising that power only where non-low-tax territories are identified that do not pose a risk to the statutory purpose of the legislation.

There are three changes to the definition of UK sales, which are designed to make the rules more proportionate and to improve their targeting. First, in determining UK sales, the legislation will look through distributors and re-sellers—that is to say, those who simply sell on goods and services unchanged. That will ensure that ORIP does not discourage businesses from using the UK as a location from which to sell to foreign markets. Secondly, there is clarification that a UK sale will arise in relation to online advertising where the advertising is targeted at UK persons. Thirdly, in circumstances where the intangible property makes an insignificant contribution to UK sales made by third parties, those sales are disregarded.

The draft regulations introduce a targeted amendment that will exempt from charge certain tax-transparent entities whose profits are subject to tax in a non-low-tax territory. Without that exemption, those entities would be subject to an ORIP charge because they do not meet the technical criteria of being a tax resident in a non-low-tax territory, even though the relevant profits will be subject to tax there.

There are three changes designed to minimise double taxation. The first concerns intangible property held by a partnership, and prevents a tax charge on the partners where the partnership is appropriately taxed. The second prevents multiple ORIP charges where a multinational group has more than one entity in a low-tax territory, and the same intellectual property-derived income is paid from one to the other. Thirdly, the draft regulations clarify that where there is a charge under the measure there is no duty to withhold income tax at source on the same income.

The final change provides clarification on the meaning of tax outside the UK, as meaning tax payable or paid that is comparable to UK income tax or corporation tax. These technical changes are being introduced to ensure that today’s important measure, which prevents large multinationals from gaining unfair tax and competition advantages, works as intended. I hope that colleagues will join me in supporting the draft regulations, which I commend to the Committee.

Oral Answers to Questions

Debate between Jesse Norman and Neil Parish

Thursday 18th January 2018 Commons Chamber

[Jesse Norman]

The traffic commissioners are acting speedily and effectively and as a unified group on this issue. I expect the consultation to continue to give—through the proposed exemptions and workarounds that we have been looking at—further comfort to the sector.

[Neil Parish (Tiverton and Honiton) (Con)]

2. What progress he has made on rail improvements in Devon and the south-west.

South-west Growth Charter

Debate between Jesse Norman and Neil Parish

Tuesday 22nd November 2016 Westminster Hall

[Jesse Norman]

I detect a slight faux indignation on the other side, and I am sorry about that. The industrial strategy of this country is a serious, long-term matter. It needs to be agreed in a bipartisan spirit. It needs to include the whole country, including the devolved Administrations and nations. It is not something to be decided and cut off. That, if I may say, is an expression of Blairite, Napoleonic Government. We are looking for a consensus and a stable basis for future development, which can be shared by all and can survive a change of Government—it is essentially long term in character.

An industrial strategy has been attempted at various points in our past in this country, not always with great success. In the 1940s and 1950s, we had models of industrialisation based on the armed forces and people in Whitehall yanking levers that steered the ship of state. We had the corporatism of the 1970s. I suspect that we are looking to something somewhat different. If hon. Members doubt the necessity, let me remind them of two things. First, those who say they do not have an industrial strategy almost invariably have one without knowing it. Secondly, no company or charitable organisation would dream of attempting to take money from investors or donors and use it over a period of time without having a strategy for how to do so. Nor should the Government.

[Neil Parish]

I am encouraged by that, but is part of the strategy broadband? When we talk about superfast and extra-superfast, can we make sure that the rural areas of this country are connected with some form of broadband?

[Jesse Norman]

As my hon. Friend understands, I am not the Minister for Culture, Media and Support. He also knows that when I was Chair of the Culture, Media and Sport Committee, I took an active interest in that issue, and we commissioned a very reputable report from a group of academics and industry experts, which found, among other things, that BT Openreach was under-investing in its network by hundreds of millions of pounds a year. It was accretive to investors and was not down to its cost of capital. I do not want to speculate on the reasons for that, but its effect has been massively to penalise people—particularly those in rural areas. I am sure my hon. Friend supports today’s announcement of a new fund to support other players in fibre through balance sheet-matched funding, which will enable fibre roll-out, particularly in rural and suburban areas, to proceed much faster than hitherto. That is a very welcome development.

Common Agricultural Policy

Debate between Jesse Norman and Neil Parish

Monday 7th July 2014 Commons Chamber

[Neil Parish (Tiverton and Honiton) (Con)]

It is a great pleasure to take part in this debate and to follow my hon. Friend the Member for Brecon and Radnorshire (Roger Williams), who made a good case for Welsh farmers. I pay tribute to my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice). He referred to the Rural Payments Agency and how much it has improved, much of which was down to his stewardship when he was a Minister. He worked very hard, and payments are getting out on time. We inherited quite a mess, which leads me on neatly to my first point.

When the single farm payment was introduced in 2003-04, there was no doubt that the Beckett formula was complicated. It took years to sort that out, and we paid more than half a billion pounds in fines to the EU for the mistakes that were made. We do not want to repeat those mistakes, and I appeal to the Minister to ensure that we do not do so. I have been sold on the idea that the maps are best done digitally, especially because of the hedgerows and everything else, but if farmers do not have access to broadband, they either have to have somewhere to go—not just a library but somewhere where they can access broadband securely and privately—or they have to be able to use agents. Farmers do not expect to be given a fortune, but they need money to do that. We are working hard to deliver rural broadband, and I am certain that we will get there, but we are not there now. If we make a mess of introducing the reform in the first year, it will carry on year in and year out. That is precisely what happened with the previous system, and it took years to sort it out. In fact, there are some cases that have never been sorted out.

I hope that people who were not able to register under the old system for various reasons—some people pursued their registration for years—are able finally to register their land under the new system. I also pay tribute to the idea that young farmers should be helped, because the population of this country and the world is growing and we need to produce more food.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

I share my hon. Friend’s views on the importance of supporting young farmers. On the question of broadband, does he share my view that there is scope for supporting wireless broadband to reach rural areas that are hard to reach by wired means, as it were?

[Neil Parish]

I could not agree more with my hon. Friend. Wireless broadband will reach parts of my constituency in the Blackdown hills that fibre optics will not, but wireless broadband will not necessarily get there in time to ensure that applications for the single farm payment can be made online. That is why we must take care to get the payment right in the first year.

Ensuring that it is the working farmer who receives the payment is a good idea, and I am interested in what the Minister has to say about that, but we do not want to create the biggest bureaucratic nightmare to prove whether someone is or is not the farmer. If we are not careful, we will make the system increasingly complicated.

I spent rather a long time—some might say too long—dealing with the CAP in another place, and I think that one of the overall problems is that across 28 countries, from Finland to Greece, from Poland to Germany and right through to Great Britain and Ireland, there are so many crops that can be grown, so many soil types, so many temperatures and so many amounts of rainfall, with some areas getting very little and others being flooded, that if we try to come forward with a common policy, we will end up with the biggest mess known to man and woman. There is no doubt about it. We cannot have a common policy unless there is much greater flexibility.

Are we to have a policy that demands three rotational crops, because Germany grows solidly maize, maize and maize? This country has very diverse farming and lands, with uplands and grasslands, but many countries have hardly any grassland. Somebody driving from Calais to Berlin will see hardly a single hedge the whole way there, because they have all been ripped up over the years as a result of a different policy on the way they farm. We have great hedges, and it is good that they have become ecological focus areas. In my view, the hedges are probably the most important part of a field, because they are home to wildlife and birds. That, above all, is what we need to concentrate on.