I beg to move amendment 3, page 46, line 10, at end insert—

'( ) In particular, the Charter must include policies in relation to prosecution and alternatives to prosecution, and the circumstances in which monies collected but legally returnable to any person may be retained pending futher investigation.'.

With this it will be convenient to discuss the following: amendment 6, page 46, line 20, at end insert—

'(3) The Charter prepared under section 16A (1) of CRCA 2005 shall not come into effect until it has been approved by a resolution of the House of Commons.'.

Government amendment 43.

Amendment 32, in clause 92, page 46, line 26, at end insert—

'(3) That Schedule will cease to have effect on the fourth anniversary of the day on which this Act is passed.'.

Amendment 14, in clause 101, page 51, line 23, at end insert—

'(7A) Repayment interest is not taxable.'.

Government amendments 44 to 46.

Amendment 33, in schedule 46, page 353, line 21, at end insert—

'Annual report by Commissioners

2A The Commissioners must, at least once a year, make a report on—

(a) compliance by companies with paragraph 1 (1), and

(b) the amount of additional tax collected as a consequence.

2B The first report should be made not later than 18 months after the date on which this Act is passed.'.

Amendment 7, in schedule 48, page 366, line 43, leave out from 'tax' to end of line 1 on page 367.

Amendment 8, page 368, line 14, leave out 'Paragraphs (c) and (d) of sub-paragraph 2A do' and insert 'Paragraph (c) of sub-paragraph 2A does'.

Amendment 9, in schedule 51, page 382, line 41, after 'a', insert 'deliberate'.

Amendment 10, page 384, line 11, after 'a', insert 'deliberate'.

Amendment 11, in schedule 52, page 392, leave out line 7.

Amendment 12, page 392, leave out lines 10 to 16.

Amendment 13, page 392, line 46, leave out sub-paragraph (7).

Amendment 19, in schedule 54, page 410, line 34, leave out from first 'is' to end of line 35 and insert

'the end of the accounting period in which the loss is incurred'.

Amendment 20, in schedule 55, page 419, line 21, at end insert—

'(3A) The aggregate penalties against partners of a partnership under this paragraph may not exceed the amount that could have been assessed on one partner.'.

Amendment 21, in schedule 56, page 423, line 14, leave out 'by'.

Government amendments 51 to 53.

I do not intend to discuss the other amendments in the group, I simply wish to talk about amendment 3.

I suggest that Her Majesty's Revenue and Customs charter needs to be expanded to make it clear how HMRC will deal with circumstances in which a prosecution is possible or intended. I note and am perfectly content with the fact that prosecution policy as such is already tackled. Revenue and Customs prosecutors are statutorily bound to the code of conduct for prosecutors, and the circumstances in which they undertake a prosecution are already spelled out in some detail and are largely analogous to those that apply to other prosecuting authorities in the criminal law.

However, I am concerned that Revenue and Customs prosecutors are almost an afterthought. Many cases in which there is a suspicion of abuse of the tax system or even criminal behaviour are tackled in a non-judicial way—by direct recovery of funds, plea bargaining before passing papers to the prosecuting authorities, or a variety of civil actions, which HMRC increasingly takes as a substitute for criminal sanction. That gives us pause for thought. There is currently no clear policy for applying those sanctions, many are much more serious penalties than those in criminal law, and they are applied without due process—without being put before a court.

I therefore contend that people who interact with HMRC in that way need to know that the rules are applied equitably and fairly across the piece, how HMRC will interpret its extensive powers, and what they can expect from HMRC. I want to illustrate that with a particular case of a company in my constituency, which involves the vexed question of carousel fraud. I do not want to spend time explaining the intricacies of carousel fraud, which is a complex form of VAT fraud, working across international boundaries. We could spend much time discussing the details of that. That is not my purpose; rather, my purpose is to address the way in which HMRC chooses to deal with companies that it suspects of having been involved in carousel fraud.

The company with which I have had dealings in this respect is Third Dimension Ltd in Milborne Port. It deals in a commodity in which, in HMRC's view, companies involved in carousel fraud trade—namely, mobile phones—and provides a platform for the international market via the internet, enabling traders to trade across international boundaries in the mobile phone market.

I have no truck with fraudsters. I want those involved in fraud to be interdicted and prosecuted. I certainly do not believe that fraud—either against the individual or, in the case of VAT, against the state—is a victimless crime. It is not, and I have always argued in this House that we should take it extremely seriously and impose appropriate sanctions. My constituents feel exactly the same way and they have expressed that view to me. They certainly do not want people getting away with VAT fraud.

I also ought to say that I am neither a forensic accountant nor a VAT expert. If anyone asks me difficult questions, I will probably not know the answers, because we are dealing with a complex area. However, I have dealt with the criminal justice system over many years in this House and my gut feeling is that there is something inherently wrong with the system that seems to have developed, in that everybody who has any connection with a particular area of trading is treated as though they were guilty and has sanctions applied to them irrespective of any evidence of guilt.

Indeed, one difficultly has already arisen in the courts in respect of how HMRC has interpreted its brief. The Financial Secretary will know of the Livewire judgment before the High Court chancery division, which has fundamentally undermined HMRC's assumption that every trader in that area is tainted by fraud, not least because of the observations of Mr. Justice Lewison. He looked at the previous case that was relevant—the Kittel case, with which I am sure the Minister is also familiar. In particular, he looked carefully at the translation from French to English, which is a pretty rudimentary matter. His observation was that HMRC's incorrect translation changed the emphasis to

"the transaction was connected with a fraud" from the original, which said:

"the transactions were directly involved in a fraud".

HMRC misinterpreted the Kittel case, assuming that anybody with a passing connection with the trade was necessarily up for involvement, rather than applying the higher burden of proof implied in the original French of the Kittel judgment, which requires evidence of direct involvement. That case is now being challenged in the European Court of Justice and we may have a ruling in due course. Irrespective of that judgment, however, surely we do not allow collective punishment in British law for the crimes of a person or persons unknown, yet that appears to be how HMRC currently operates.

Since early 2006, HMRC has adopted what is described as an extended verification process for every trader involved in the industry, which means that it has effectively ceased paying VAT input tax refunds. A substantial amount of money is being withheld and we are now in the third year of withholding it. This has been done by a deliberately extended process, in my view. First, there is a delay in responding to requests for refunds. At the very point at which that matter reaches judicial review—sometimes only a matter of hours beforehand—there is a denial, which results in a further delay before a tribunal can consider the matter. That is followed by an HMRC appeal. That is a deliberate policy to withhold funds that are legally in the ownership of the companies, without judicial process.

When such cases have got as far as the tribunal or the High Court in chancery, there have been mixed results for the companies appealing. In some cases, the appeal has been upheld by both; in others, there has been a mixed result from the tribunal and the High Court; or the company has lost in both cases. I would be interested to know how much is currently withheld in relation to VAT reclaims, and how much is earmarked for eventual refund when the appeals are successful. My suspicion is that a very large amount is involved.

The second method that HMRC has chosen to use as a means of reprisal against assumed fraud is illustrated in its dealings with overseas banks. HMRC uses its undoubted muscle to affect the way in which overseas banks are used. My constituent's company had funds held by the First Curaçao International Bank. The bank has effectively been closed down by HMRC, and the administrators have been told that they must not allow any funds to be given to those who have funds invested in the bank. No charges have been brought against the bank, under British jurisdiction or any other; this is simply a case of pressure being put on it.

A list has apparently been provided to the bank's administrators of the people to whom funds may not be made available, and of anyone having dealings with those people. That is a pretty extraordinary state of affairs. Those people have not been brought before any court. They have not been found guilty of any crime, yet they have had their funds frozen on suspicion and, in the case of the First Curaçao International Bank, in a foreign jurisdiction. I am led to believe that, in this context, we are talking about billions of pounds in funds held by companies, many of which must be innocent of any fraud.

The third instance of intervention is the pressure that has been applied to UK high street banks. Again, companies engaged in this area of trade have had their accounts closed on the recommendation of HMRC. They, too, are companies against which no evidence has been adduced, no prosecution brought and no conviction obtained. I would be interested to know how many companies have been closed in that way and, against that figure, how many have actually been prosecuted.

I suspect that what is happening is a substitution of a criminal legal process by a civil legal process that is entirely within the hands of HMRC, and I do not believe that the House has ever sanctioned such a process. Extra-judicial action by HMRC in the absence of any evidence is not something that we would normally countenance. If we were to do so, we would certainly place limits on the sanctions that could be applied—just as we place limits on the sanctions to be applied in criminal cases—rather than simply giving HMRC a free hand.

What we have here is an arbitrary exercise of power by HMRC without any due process. It is an exercise of guilt by association that is foreign to British law in any respect, either historically or currently. It involves the substitution of the opinion of HMRC for a judgment, and the testing of that judgment by probative means, in court. I have to say that HMRC opinion is not unquestionable and it is not by definition correct. If it were, these companies that are so strongly suspected of being involved in VAT fraud would not have been given VAT registration in the first place.

The amendment is designed to make transparent a process that seems to have developed. If it is believed right and proper for HMRC to use civil process in this way to deal with unquestionably serious matters of fraud, these issues should be put before Parliament and agreed here. We should apply proper tests of evidence, proper judicial process and appropriate sanctions in the case of the felony, for that is what it would be if the case were proven. Instead, we have seen an incremental approach by HMRC, which I do not believe is satisfactory.

To conclude, I have no evidence whether the company in my constituency or any of the other companies have been involved in fraud. How could I possibly know? What I am saying is that while I want HMRC to be rigorous in its approach, I also want it to be transparent and lawful. I do not believe that the actions currently taken by HMRC are, frankly, lawful. We have due process in this country and it should be transparent. I invite the Minister to answer my points if he can, as I would be grateful to know the answers, but I would also like to hear him accept the principle that such processes should be open, transparent and agreed by Parliament, rather than somebody in the recesses of HMRC deciding that they have a means by which they can exercise their powers without judicial process.

It is a pleasure to follow Mr. Heath, who has raised a number of important points, which I hope to touch on in the context of the HMRC charter and amendment 6. The group of amendments is rather lengthy, so I shall try to run through my amendments as quickly as possible.

Clause 92 and schedule 46 relate to the senior accounting officer and the new responsibilities placed on him. We debated the matter in Committee of the whole House and, indeed, in the Public Bill Committee. My hon. Friend Mr. Hoban pointed out on a number of occasions how the proposals were produced in the Budget and the Finance Bill without any consultation, yet there are concerns about their impact on large companies and about the scope of the clause.

We are grateful that the Government have tabled amendment 43, which applies the measures not to "large" but to "qualifying" companies. That is a step forward, but we none the less have a number of doubts, particularly about the lack of clarity on the administrative costs to affected companies. No proper regulatory impact assessment was done prior to the announcement because the necessary consultation did not happen, so some doubt necessarily remains.

We know that the Government estimate that about £140 million will be raised by the measures, but there remains a degree of doubt about whether that will be the case. We have tabled two amendments which I think will help the House to assess the effectiveness of the proposals. Amendment 32 is a simple sunset clause and would enable the provision to fall after four years. If after four years it emerges that it is not causing a disproportionate cost to businesses to establish that the senior accounting officer can sign off the accounts, fair enough. If it proves that substantial amounts of revenue are being raised as a consequence of the provision, there will clearly be a strong case for renewing it, but if not—I have to say that at this stage we cannot be confident one way or the other—it will be dropped.

Amendment 33, which relates to schedule 46, would require the commissioners to prepare a report on compliance with the new provisions and the additional tax raised. It would enable us to have a much better view of whether the measure was proving to be effective, given that consultation was not carried out in advance and its origin remains something of a mystery.

Clause 95 and schedule 48 relate to the extension of information and inspection powers. We have tabled two technical amendments. Currently, there are powers to inspect property for valuation purposes, which relate to a number of taxes, including stamp duty reserve tax. The Law Society has questioned how those powers will be used, and I should be grateful if the Minister explains how they will be relevant to SDRT.

Let me put amendment 8 in context. The tribunal may not approve an inspection under the new powers unless certain conditions apply. They include the ability of the relevant taxpayer to make representations, the ability of the occupier of the premises to make representations, and the supplying of a summary of the representations to the tribunal. Those conditions are disapplied if the occupier of the premises cannot be identified.

It is reasonable for the requirement to supply a summary of the representations to the tribunal not to apply if the occupier cannot be identified, but why should it not apply if the taxpayer is able to make representations? If the taxpayer makes representations, there will be no obligation for a summary to be supplied to the tribunal. That seems somewhat strange. We seek to amend schedule 48 so that the occupier would not be given an opportunity to provide representations, but a summary could still be provided if the taxpayer has made representations.

Paragraph 15 of schedule 51 provides, broadly, for a 20-year time limit for assessments in a case involving a loss of tax attributable to a failure by a person to make a return under the stamp duty land tax legislation. Normally, the time limit is six years. The Law Society has told us that the period should be extended from six to 20 years only when failure is deliberate, rather than inadvertent and careless. Consequently, we have sought to address that in amendment 9, and similarly in amendment 10 tabled to paragraph 16 of schedule 51, by making the requirement a deliberate failure.

Clause 99 and schedule 52 relate to the recovery of overpaid tax, setting out circumstances where a claim is disallowed. One of those—case A—is if a mistake is made in a claim, election or notice. The Law Society made the point that a mistake that gives a right of recovery against HMRC could result in a mistake in a claim, and therefore the unfortunate situation could arise that a mistake by HMRC leads to a mistake in a claim which then, in turn, means that the claim is disallowed. The second concern raised with us by the Law Society is what exactly a mistake means in those circumstances. The Minister might be able to help on those points, which relate to amendment 11.

Amendment 12 highlights the fact that there is a separate regime for mistakes relating to capital allowances. Will the Minister explain why capital allowances are singled out? Finally in terms of schedule 52, amendment 13 relates to case F, which excludes amounts paid, or liable to be paid, in consequence of enforcement action. Why are proceedings for enforcement relevant to HMRC's liability under the schedule?

Clause 101 and schedule 54 relate to repayment interest on sums to be paid by HMRC. Amendment 14 seeks confirmation that repayment interest is not taxable. Will the Minister respond to that point? Amendment 19 essentially asks why the repayment interest start date should be on 31 January next, following the year in which the loss is incurred, rather than at the end of the accounting period in which the loss is incurred, which is what we have sought to achieve in amendment 19.

Clause 105 and schedule 55 relate to the penalty for failure to make returns. Paragraph 25 of the schedule states that where a representative partner fails to make a partnership return, a

"penalty in respect of the failure is payable by every" person who was a partner in the partnership at any time during the relevant period. Amendment 20 would ensure that aggregate penalties are limited to the amount that could have been assessed on one partner. Otherwise, penalties could be more harsh where a partnership is late in making a return than where a company of equivalent size is late in equivalent circumstances. There does not seem to be any particular logic as to why the regime should be harder on a partnership as a whole than a company.

Clause 106 and schedule 56 relate to the penalty for failures to make payments on time. Amendment 21 would delete what I believe to be a typo. The Minister is a reasonable man and I assume he will accept it; if he does not, I am perfectly prepared to divide the House, but I am sure he will not make that necessary. The current wording of the schedule is as follows:

"that person fails to make or deliver the return on or before by the date by which it is required to be made or delivered".

That first "by" appears to be a typo, and therefore should be removed.

In respect of clause 107 and schedule 56, the amendments are of a technical nature. The clause and schedule enable taxpayers to benefit from the suspension of penalties during the time-to-pay arrangements even if they have already incurred a late payment penalty. That ensures that any penalties arising after a taxpayer's approach to HMRC will be suspended.

I want to deal with the HMRC charter last because we have now gone through a number of clauses and schedules relating to HMRC powers. It is striking that every year we generally extend HMRC's powers in this area as part of a process relating to powers, deterrents and safeguards. We spend a lot of time scrutinising the powers and deterrents, but very often the argument for the safeguards is that they will be set out in the HMRC charter. We debated the charter in Committee—the first draft of it caused considerable concern, but I acknowledge that the Government have moved on it. There remain some discussions to be had on this important document, and it is important that the House scrutinises how HMRC works and the safeguards that exist for the taxpayer. That is, in essence, the argument made by the hon. Member for Somerton and Frome.

The fact is that the House has very little oversight of the HMRC charter. We have had an opportunity to debate it in our consideration of the Bill and I dare say that we will be able to do much the same when we consider future Finance Bills. Amendment 6 would allow the House to debate the charter again before it is published and before it is finalised, so that the views of right hon. and hon. Members can be expressed and there is an opportunity to raise the concerns of constituents. Constituents have also come to me to discuss how they are treated while the Government and HMRC seek to address carousel fraud. That is but one example, and I am sure that hon. Members can identify others. It is important that the House has an opportunity to debate them.

I have covered, as quickly as possible, a large number of amendments, some of which are technical, others of which are broader in nature. I reiterate that it is important that the House scrutinises HMRC and that we ensure that the right balance is found between the powers, penalties and deterrents available to HMRC and the safeguards available to taxpayers. I press the Government to share that view, and I hope that we have future opportunities to debate the HMRC charter.

for raising specifically the issue of what the charter should cover, as the charter is an important aspect of this Bill. The Minister will recall that the Government announced a consultation on a taxpayers charter last year and we were given a ministerial statement on the matter. During the Report stage of last year's Finance Bill, my Liberal Democrat colleagues and I tabled a new clause entitled "Taxpayers Charter". Of course, it did not succeed, but we are grateful that something similar has appeared in this Bill.

It is important that taxpayers' statutory rights, including the basic right of appeal against actions or decisions, is enshrined in some way, and the same applies in respect of taxpayers' statutory duties—I am thinking of provisions relating to notice period requirements, documents that HMRC has a right to access and penalties for failure to comply. We are very happy about that arrangement, but clause 91 would insert a new section into the Commissioners for Revenue and Customs Act 2005. This clause only pays lip service to the call for a charter. In reality, it provides little or no protection or certainty for the taxpayer and, indeed, pays the taxpayer little regard. The charter cannot be independent if HMRC is solely to decide its content. I appreciate the amendment that the official Opposition have tabled to ensure that the House debates that issue, because it is important.

We would have liked the Government to consult on the content of the charter well before now. We have spent quite a lot of time consulting on stricter penalty regimes and very little on protecting the taxpayer. As I understand it, the charter will not be in statute—only the power to create a charter. That is a slight disappointment. The Bill says that the standards and values are to be "aspired" to, but there will be no way of requiring HMRC to meet and maintain the standards that it should already have achieved. The review of HMRC's adherence to the charter would not require any consequential action. If HMRC fails to meet the aspirations in the charter, there is no provision to discipline it or enable parliamentary pressure to be applied,

While we welcome a charter setting out the rights and duties of the taxpayer, no protection is afforded to the individual. In fact, the Government have spun reforming ideas around to suit the interests of HMRC, rather than to protect the taxpayer. We do not have a taxpayers charter, but an HMRC charter—not what was envisaged at all. Some of our concerns are shared by professional bodies. The Institute of Chartered Accountants says:

"The current wording of the clause does not meet the needs of taxpayers. Firstly, it is drafted in terms of HMRC's 'behaviour and values' rather than the rights of the taxpayer. Secondly, it does not make adequate provision for oversight and review."

We have spent much time in recent Finance Bills extending the powers of HMRC in various ways, including the right to impose penalties, to make inspections, to collect data and to charge interest on late payments. Everything has been going HMRC's way, and this was an opportunity to try to redress the situation, but the Government have failed to do so.

Clause 92 concerns senior accounting officers. I can understand the Government's approach, which would identify someone who would be responsible for ensuring that the accounting systems are adequate and accurate for tax reporting. It refers to the preparation and submission of returns to HMRC, not tax figures in financial statements. The SAO must ensure that tax returns are timely and procedures are adequate for accurate tax reporting. The adequacy of the systems must be certified annually, because the tax code changes with alarming regularity. Systems have to be changed almost annually to ensure that the data in returns are accurate. The SAO will be personally liable for a penalty of up to £5,000 for careless or deliberate failure to comply with the rules. According to the impact assessment, some 2,000 individuals will need to comply with this new regime.

The regime is supposed to target large companies, but the definition of large is not exact. Indeed, the Government have tabled some technical amendments to try to address that issue and ensure that we are targeting the right sort of large companies. That lack of definition is slightly disappointing in provisions that will charge individuals with some heavy responsibilities, for which the penalties can be significant—not only in financial terms, but in professional terms, because a person's ability to retain their job or get another one might be limited if they were found liable in this respect. It is important that the Government have tight definitions and an understanding so that those individuals—it has been assessed that there are about 2,000 of them—have clear and accurate information about what their responsibilities are and what they have to do, and do not find themselves falling foul of inaccurate definitions or definitions that can be construed or introduced in different ways that could disadvantage them in their work.

Finally, on the issue of cost, although I can understand why the Government are formulating this proposal, there are serious concerns that businesses will face quite a considerable increase in costs, bearing in mind the potential of the expected yield. Do we have real proportionality? Will the costs incurred by businesses up and down the country be proportionate to what the expected yield might ultimately be? I would be grateful if the Minister could comment on that.

This group of amendments relate to the tax administration elements of the Bill. The formation of HMRC and the merger of the previous separate bodies provided a lot of opportunities to deliver more consistency and clarity for taxpayers and businesses. We are taking advantage of those opportunities in this part of the Bill.

The package has been the subject of extensive consultation. The key elements replace myriad complex penalties and surcharges with a more effective and proportionate penalty structure with improved safeguards; replace the confusing old range of interest rates and formulae with a new regime based on recompense, fairness and simplicity; make it easier for taxpayers to pay what they owe on time, so supporting HMRC and tackling effectively those who pay late; extend the compliance checking introduced in the Finance Act 2008 to other taxes, clarifying where visits can be made and what time limits reply; and pave the way for the launch of the new HMRC charter by the autumn. Mr. Breed just commented on that, and the charter will play an important role in the relationship between HMRC, taxpayers and agents, setting out taxpayers' rights and responsibilities.

The hon. Member for South-East Cornwall quoted criticisms from the Institute of Chartered Accountants of England and Wales. I think that since those criticisms have been made they have been overtaken a bit by developments and I can reassure him by quoting what the ICAEW's briefing said to the Finance Bill Committee on 17 June:

"We support the current version of the Charter which we believe is a well balanced document which sets out the rights and obligations of the taxpayer."

That tax administration package runs in parallel with measures to protect tax revenues. There has been a lot of discussion with interested parties on these measures and I want to place on record my thanks for the help that we have received.

Amendment 3, which was moved by Mr. Heath, is not really about the charter, as I think that he would accept. He has taken the opportunity to raise perfectly fair points about the HMRC approach to carousel fraud. This is probably not the place for an extensive discussion on that subject. However, he acknowledged that the scale of such fraud was vast. We were threatened with a loss of more than £5 billion in 2007-08, and that level of fraud obviously requires HMRC to take every reasonable and proportionate step to prevent it. I would suggest to the hon. Gentleman that the response has been proportionate.

HMRC will withhold repayment where there are reasonable grounds to suspect knowledge of fraud. That approach is being supported by the courts when it is challenged. Such fraud is perpetrated by criminals seeking to steal vast sums of public money. It is complex and orchestrated by criminal gangs using what often look like legitimate trading companies, but the fraud only works if there is complicity in the supply chains, which often are very long. I suggest that it is not unreasonable for HMRC to expect companies to take steps to satisfy themselves that their transactions are not part of a fraudulent supply chain.

If HMRC could use only criminal proceedings to prevent fraudulent repayments, I am afraid that the criminal justice system would rapidly grind to a halt. It is right that HMRC has civil powers to tackle fraud where the risk to the Exchequer is as significant as it is in this case. The powers that HMRC is using to protect taxpayers from organised crime exist already and are not new.

Safeguards are in place, and I should be very happy to discuss our approach with the hon. Member for South-East Cornwall separately, but I do not think that the HMRC charter is the vehicle to address this problem. None of the representative bodies that we consulted suggested that this specific point about fraud should be in the charter.

Amendment 6 would delay the charter coming into effect until it had been approved by a resolution of the House. I do not think that that would be the right thing to do: the charter is intended to be a document that can be easily updated, and an advisory panel with a majority of external members will monitor performance. It would not be appropriate for approval by the House to be necessary whenever the wording of the charter was updated.

Amendment 32 would impose a four-year time limit on the application of clause 92. That would imply that, in four years' time, large companies no longer needed to maintain tax accounting arrangements. That would be a mistake. As the House will be aware, we have significantly amended clause 92 to include the reference to materiality that Mr. Hoban first suggested. I do not think that we should have a sunset clause to constrain it further.

Amendment 33 would require an annual report on the impact of the measure, but it strikes me that reviewing the benefits of one measure in isolation would be of limited value. HMRC looks at the tax compliance position of large businesses, and its relationship with them means that it takes a wide range of factors into account. I do not think that it would be helpful to divert HMRC resources into an annual assessment of one measure in isolation.

Government amendment 43 is a consequential amendment to align the terminology in clause 92 and changes the reference to "large" companies in schedule 46 to "qualifying" companies. I am grateful to Mr. Gauke for welcoming that.

Amendment 7 would remove stamp duty reserve tax from the narrow list of taxes to which the new aligned power to inspect property for the purposes of valuation applies. HMRC has to undertake valuations for stamp duty reserve tax, because the consideration for shares on which the tax arises may be in the form of property. The value of the property affects the value of the transaction, and the new power replaces existing individual powers for each tax, including stamp duty reserve tax. The powers being replaced took different forms and had different safeguards, and the new power has been welcomed because it has stronger safeguards. It is proportionate and necessary and includes improved taxpayer safeguards, so I hope that amendment 7 will not be pressed.

Amendment 8 relates to the valuation inspection power more generally. In Committee, I was pleased that Opposition Members appreciated that the clause providing for property valuations contained considerable improvements in the safeguards for taxpayers. The importance of that provision is recognised across the House, because the strongest possible safeguards should apply. The amendment would strengthen those safeguards, so I am content to accept it.

Sadly, I cannot be as helpful with amendments 9 and 10, both of which relate to stamp duty land tax. They would restrict to four years the time limit for HMRC to make assessments where the taxpayer has failed to notify it of a land transaction, unless that failure was deliberate. The provisions that we have reassure the majority who pay their taxes that those who try not to pay them will have to do so in the end. It would not be fair on the compliant majority if, after a period, people who failed to notify did not have to pay the tax because the limit had elapsed. I hope that those amendments will be withdrawn.

Amendments 11 and 12 seek to widen the scope for HMRC to accept a claim for repayment by removing some of the exceptions, but the capital allowances system is designed to give taxpayers very wide flexibilities and choices. Businesses have made it clear that they value those flexibilities and choices and would not want them to be curtailed. If a claim is out of time and it is not appropriate to extend time limits under the existing rules, there would be no reason to allow a claim under this provision to achieve the same end. I hope those amendments will not be pressed.

Amendment 13 seeks to remove an exclusion which applies where HMRC started court proceedings to recover a sum and either obtained court judgment or the taxpayer agreed to settle the matter. By the end of the process, the taxpayer will have had every opportunity to contest the amount due. HMRC will have had to satisfy the court that the debt is due or the taxpayer will have had to agree to settle HMRC's claim in order for the exclusion to apply. To allow taxpayers the possibility of further disputing the amount would seriously weaken HMRC's ability to recover tax liabilities from defaulters.

On amendment 14, as each tax is brought into the new interest regime, consequential changes to existing legislation will be made by regulations, using the powers in clause 103. These changes will ensure that the result that the hon. Member for South-West Hertfordshire is seeking will be achieved. On amendment 19, the hon. Gentleman explained the effect of the proposal. The position is provided for in schedule 54 and is in line with the general rules that apply when repayment interest starts to run. Amendment 19 would be inconsistent with those rules and I must therefore resist it.

Amendment 20 relates to schedule 55, which creates an aligned and modern penalty regime to deter failures to submit tax returns. It is right that where an obligation to submit a return exists, failure to do so should result in a penalty. However, we consider every proposal on its merits. I agree that amendment 21 corrects a minor drafting error. I am grateful to the hon. Member for South-West Hertfordshire for drawing the attention of the House to it, and I am happy to accept amendment 21.

Government amendments 44 to 46 in clause 107 and Government amendments 51 to 53 in schedule 56 correct technical deficiencies that could lead to taxpayers not being able to benefit from the suspension of late payment penalties in the way that was intended. I believe they will find favour across the House.

I congratulate Mr. Gauke on having won two amendments in a Finance Bill—quite a proud record. I am grateful to him for his support for some of my contentions, as I am to my hon. Friend Mr. Breed.

With reference to the Minister's comments on my amendment, we agree about the seriousness of the fraud, the potential loss to this and other jurisdictions, and the need for effective interdiction and penalty. I make it plain, however, that I still have concerns. The Minister says that the response of HMRC is reasonable and proportionate. Clearly, it is reasonable and proportionate to take those confiscatory measures in the case of somebody who is perpetrating a fraud, but by its actions HMRC seems to be extending that to anyone who is associated with a trade in which fraud has taken place, and I am not sure that it is reasonable and proportionate to take confiscatory action against a person or company who is trading in that environment if they, in turn, have taken measures which are reasonable and proportionate to make sure that they are trading lawfully and not encouraging or permitting fraudulent behaviour by others.

The "reasonable suspicion", which the Minister says is the test, is of course put to the test only when the case is before a tribunal or the High Court. The way in which matters have been—I was going to say "prosecuted", but that is exactly the wrong term to use—carried out hitherto suggests that that finding of fact happens at a very late stage in the process. According to information that I have received, a large number of those cases are not found to be based on reasonable suspicion when a tribunal or, more particularly, the Court, has had a chance to adjudicate. That is what worries me. Having heard what the Minister said, I still feel that there is an extra-judicial process going on; it is perhaps necessary in some cases, but in others it is excessive.

The Minister has found me out, in the sense that he has realised that amendment 3 was a probing amendment to enable me to raise essential matters on behalf of my constituents and others. I would be most grateful if, having looked again at my remarks, he would write to me to explain the Government's position, perhaps in slightly more detail than is possible in a speech. I may well then take him up on the suggestion that we discuss the matter privately. It is certainly not my intention to divide the House this evening, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.