Finance Bill - Business may pay tax in euros

UK companies may be able to submit and pay tax accounts in euros under provisions introduced in the finance bill.

The prospect emerged after a bitter battle in the Commons committee handling Budget legislation, over the extent of power available in making tax regulations without seeking approval from parliament.

Tory MPs claimed order-making powers which had previously required prior Commons approval were being extended to enable the government to introduce tax-making powers to support the euro.

Shadow chief secretary David Heathcoat-Amory said that Treasury changes to taxation had to be confirmed by a resolution of the Commons within a limited period.

Liberal Democrat spokesman John Burnett protested the government was seeking deeply objectionable ‘carte blanche power to impose charges to taxation’.

Tory MP Nick St Aubyn claimed the European Commission could seek, and the government could impose, a European-wide withholding tax through this procedure.

He warned: ‘The consequences for our economy, particularly for our vital interests in finance and in the City, would be serious.’

Labour MP Ross Cranston said it was a modest proposition and Tory fears should be taken with a pinch of salt.