TaxPersonal TaxFinance Bill: MPs urge rethink on double tax

Finance Bill: MPs urge rethink on double tax

The government has been urged to rethink its crackdown on double taxation relief after delaying it for a further nine months.

The demand came from the Tories as detailed debates on the Finance Bill started in committee in the Commons amidst remarkable co-operation from the opposition.

Shadow Chief Secretary and accountant MP David Heathcoat-Amory protested chief secretary Andrew Smith had ‘insulted’ senior PriceWaterhouseCoopers partner Peter Wyman over the warning that banning the mixing of overseas investment profits would cost businesses billions of pounds.

But the first meeting of the committee took just 27 minutes to agree the order in which clauses of what Heathcoat-Amory protested was ‘the longest Finance Bill of all time’ will be debated.

The government business motion was passed without a vote. This contrasted with occasions under the last Tory administration when the process of starting the line-by-line consideration of the Bill took days as Labour mounted what was known as ‘trench warfare’ against Conservative Budget proposals.

Heathcoat-Amory warned the 558 pages of the Bill ‘demand a great deal of scrutiny’.

He complained: ‘The Bill is immensely complicated – regrettably far too complicated for the ordinary taxpayer. It makes no attempt to write fiscal legislation in language that is understandable to our constituents, so it represents another gap between politicians and electors.

‘Even tax practitioners find much of its content hard to understand, particularly the schedules, which take up almost three-quarters of the Bill. He claimed the Treasury are ‘in retreat’ over the double taxation provisions which showed the immediate complaints of the accountancy profession to have been justified.

He claimed: ‘A Treasury special adviser had imposed on the Inland Revenue against its wishes a clumsy attempt to rewrite double taxation and foreign earnings law.’

He added that Wyman was right, ‘so some humility from the government would be in order on that and other issues.’ Liberal Democrat Treasury spokesman Edward Davey said the length of the bill was ‘a serious issue’ and demanded the government separate legislation on urgent budget matters – such as the rateof income tax – from the mass of technical tax legislation which should be covered in a separate bill.

He said the Tax Technicalities Bill should be produced in draft form and put out to consultation for several months so difficulties and mistakes could be ironed out before the legislative process began.

He said this would have prevented the Government falling into ‘the kind of deep hole in which they have found themselves on such issues as double taxation.’

Davey warned the Government suggestions the committee should complete its work by the end of June are ‘slightly optimistic’ and said the government would have to correct errors ‘many times because it is so long and complex.’

He complained: ‘Businesses and individuals who examine the bill plan their tax and business affairs on the basis of its provisions.’

Smith did not reply to the complaints. Introducing the sittings motion, he said only: ‘I hope the committee will enjoy what should be good discussion that will be tempered only by the sad knowledge that, however long MPs might wish to continue, the summer recess will eventually draw our proceedings to a close.’

Tax wars:Storm over double tax echoes IR35

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