Finance (No. 2) Bill

Nigel Evans Excerpts

Committee stage & Committee of the Whole House (Day 2)
Tuesday 20th April 2021 Commons Chamber

[Mr Nigel Evans in the Chair]

[The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)]

I should explain that, in these exceptional circumstances, although the Chair of the Committee would normally sit in the Clerk’s chair during Committee stage, in order to comply with social distancing requirements, I will remain in the Speaker’s Chair, and I will be carrying out the role not of Deputy Speaker but of Chairman of the Committee. We should be addressed as Chairs of the Committee, rather than as Deputy Speakers.

Clause 30

Construction industry scheme

Question proposed, That the clause stand part of the Bill.

[The Second Deputy Chairman]

With this it will be convenient to discuss the following:

Amendment 70, in schedule 6, page 121, line 1, leave out “ceases to be” and insert “is not”.

This amendment would allow that a de minimis amount of minor works can be disregarded.

Amendment 71, page 121, line 2, after “time” insert

“, but the body or person expects it to be met at any time,”.

See the explanatory statement for Amendment 70.

Amendment 72, page 121, line 3, leave out “continuing to be” and insert “being”.

See the explanatory statement for Amendment 70.

Amendment 84, page 121, line 4, leave out “any further”.

See the explanatory statement for Amendment 70.

Amendment 85, page 121, line 5, at end insert “exceeding £3,000,000”.

See the explanatory statement for Amendment 70.

Amendment 73, page 121, line 8, leave out paragraph 3.

This amendment would remove the provision making businesses who fall within the current definition, but who would not fall under the new definition of “deemed contractor”, to be drawn into the new regime for CIS from 6 April 2021.

Amendment 74, page 121, line 20, leave out paragraph 4.

This amendment would remove the provision requiring that, when a contractor is deducting the relevant percentage from a contract payment made to a sub-contractor, they should first deduct only the cost of material purchased by the sub-contractor from the figure to which the relevant percentage deduction is applied.

Amendment 75, page 123, line 17, leave out “2021-22” and insert “2022-23”.

This amendment would delay commencement until April 2022.

Amendment 76, page 123, line 20, leave out “2021” and insert “2022”.

See the explanatory statement for Amendment 75.

That schedule 6 be the Sixth schedule to the Bill.

Clause 36 stand part.

Government amendments 17 to 42.

That schedule 7 be the Seventh schedule to the Bill.

Clause 41 stand part.

Clause 115 stand part.

That schedule 27 be the Twenty-seventh schedule to the Bill.

Clauses 117 to 121 stand part.

Amendment 77, in schedule 29, page 319, line 23, at end insert—

“32 After section 280 of Finance Act 2014 insert—

‘280A Treatment of promoters of abusive tax avoidance schemes

(1) In any proceedings for the offence of cheating the public revenue, where—

(a) the person charged acted as a promoter in relation to relevant arrangements within the meaning of section 235, or the person charged gave in the course of business affirmative advice on the viability of relevant arrangements within the meaning of section 234, and

(b) the relevant arrangements were abusive tax arrangements within the meaning of sub-paragraph 3(2) of Schedule 16 of Finance (No. 2) Act 2017,

subsection (2) shall apply, subject to subsection (3).

(2) If, at any time that the person charged acted so as to fall within subsection (1)(a), that person was aware of the course of action or intended course of action having the consequence that the relevant arrangements were abusive tax arrangements within the meaning of sub-paragraph 3(2) of Schedule 16 of Finance (No. 2) Act 2017, the actions of that person in respect of the relevant arrangements shall be deemed to have been dishonest.

(3) Subsection (2) shall not apply if the person charged proves that they held in good faith the belief that the course of action or intended course of action was reasonable in the circumstances.’”

This amendment would cause promoters of tax avoidance schemes which are abusive (defined in existing legislation to mean schemes where it is not reasonable to regard the scheme as a reasonable course of action) to be treated as acting dishonestly for the purposes of criminal prosecution of tax offences, without dishonesty having to be separately proved by the prosecution.

That schedules 29 to 32 be the Twenty-ninth to Thirty-second schedules to the Bill.

New clause 14—Review of changes to construction industry scheme—

“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to the construction industry scheme by section 30 and schedule 6 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider the effects of the provisions on—

(a) business investment,

(b) employment,

(c) productivity,

(d) GDP growth, and

(e) poverty.

(3) In this section—

‘parts of the United Kingdom’ means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

and ‘regions of England’ has the same meaning as that used by the Office for National Statistics.”

This new clause would require a report on the construction industry scheme provisions on various economic indicators.

New clause 15—Review of effect on tax revenues—

“(1) The Chancellor of the Exchequer must review the effects on tax revenues of section 115 and schedule 27, and sections 117 to 121 and schedules 29 to 32 of this Act, and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider—

(a) the expected change in corporation and income tax paid attributable to the provisions; and

(b) an estimate of any change, attributable to the provisions, in the difference between the amount of tax required to be paid to the Commissioners and the amount paid.

(3) The reference to tax required to be paid in subsection 2(b) includes taxes payable by the owners and employees of Scottish limited partnerships.”

This new clause would require a report on the impact of certain provisions of the Bill on narrowing the tax gap by comparing: (a) the expected change in corporation and income tax paid attributable to the provisions and (b) an estimate of any change, attributable to the provisions, in the difference between the amount of tax required to be paid to the Commissioners and the amount paid. In particular, this includes taxes payable by the owners and employees of Scottish limited partnerships.

New clause 29—Review of tax avoidance measures—

“(1) The Chancellor of the Exchequer must review the impact of sections 117 to 121 and Schedules 29 to 32 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act, and then annually for five further years.

(2) A review under this section must estimate the expected impact of sections 117 to 121 and Schedules 29 to 32 on—

(a) levels of tax avoidance,

(b) levels of tax evasion, and

(c) reducing the tax gap in each tax year from 2021-22 to 2025-26.”

This new clause would require the Government to review the impact of the provisions relating to tax avoidance and publish regular reports setting out their findings.