Govt under fire over defective legislation
The Treasury has come under attack from MPs for proposing widespread use of extra-statutory concessions to bypass Finance Bill weaknesses.
Concern arose during debates on Treasury attempts to close ‘black holes’ in VAT law which threaten several hundred million pounds of revenue. Exchequer Secretary Phillip Oppenheim, who denied the concessions were unusual, complained the amount of revenue at risk had forced ministers to act in this way.
He protested: ‘In the past few years a massive industry has developed of accountants and lawyers who have crawled over every aspect of the tax system.’
He said a crackdown on value-shifting by retailers selling insurance followed failed attempts by Customs & Excise to persuade companies to stop the practice. The Government was acting now out of ‘exasperation’.
The Opposition backed the crackdown on the VAT avoidance industry, but objected that for the first time ministers were actually announcing concessions during the passage of legislation admitted to be faulty.
Even Tory accountant MP Tim Smith complained: ‘It is not satisfactory to introduce a new provision and then immediately to say it is defective and the matter will be dealt with under an extra-statutory concession.’
