Lord Myners
Main Page: Lord Myners (Crossbench - Life peer)
Lord Sassoon
My Lords, the previous Government brought in the current interest rate regime within the past year, and after extensive consultation, on the basis that late payments are calculated at 2.5 per cent over the bank rate and repayments are 1 per cent less than the bank rate, subject to a minimum of 0.5 per cent. This regime is similar to that of other countries ranging from Australia to the United States. Indeed, of the six or eight countries surveyed, Japan is the only one that does not apply differential rates to payments and repayments. So, in that sense, the system does reflect a due degree of fairness.
Lord Myners
My Lords, can the Minister reconcile his comments about fairness with the reported remarks in the Financial Times of 19 August from Mr David Hartnett, the Permanent Secretary in HMRC, that he proposes henceforth to take a gentler and easier line on tax avoidance?
Lord Sassoon
My Lords, I do not have the precise context in which Mr Hartnett made those remarks. However, in relation to the PAYE reconciliation exercise that we are talking about, the fact that interest is being waived for people who have underpaid, that balances under £300 are being written off and that those who do have to make further payments will be able to make them over a number of years, particularly where hardship is concerned, represents an appropriate response in this case.