Clause 8

Part of Finance (No. 2) Bill – in a Public Bill Committee am 5:45 pm ar 19 Hydref 2010.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of David Gauke David Gauke The Exchequer Secretary 5:45, 19 Hydref 2010

As we have heard, amendment 5 would add a requirement that any regulations made under the power provided in clause 8 must have regard to accessibility and convenience to the taxpayer. I am sure that the Committee is united in wanting to ensure that tax forms are as accessible and convenient as possible. It is important that HMRC faces a great deal of focus on that.

HMRC has carried out a lot of work on customer segmentation and it is important that the customer segmentation that it has identified as being willing and able is as big a part of the population as possible. There are many who are willing, but not necessarily able to comply as they would like to. HMRC must engage with such people and ensure that the payment of taxes when they are due is as accurate, accessible and convenient as possible. Both sides will agree with that and we can work as a bipartisan-tripartisan Committee of national unity on that matter.

That said, we believe that the amendment is unnecessary and perhaps it is worth mentioning how clause 8 will apply. It is concerned with procedures under which an individual or another non-corporate person, such as a trustee, deducts tax from interest and similar payments by them. Typically, that will occur when such a person pays yearly interest to a lender resident outside the UK.

The clause is not concerned with procedures such as those under which taxpayers report interest received by them; for example, from bank and building society savings accounts. Such payments are regulated by the tax deduction scheme for interest—TDSI, if I may use an acronym. I can confirm that the power has nothing at all to do with such interest, for which there are entirely separate statutory provisions. Nor does it have anything to do with the PAYE system.

The aim of the clause is to provide a regulation-making power for payment of interest, rather than receipt of interest. The current procedures can be difficult for taxpayers to use. For example, at present, the procedures state that the taxpayer must send an account of payment to HMRC without delay, without specifying what “without delay” means, or in what form the account must be sent.

With the new regulation-making power in place, it will be possible to modernise the old procedures. For example, it will be possible to provide a bespoke form, and consideration can be given to aligning the procedures with the equivalent rules that apply to companies, for which there are long-established regulation-making powers.

Any regulations made under the power will be subject to consultation and an impact assessment. They will also be subject to further parliamentary scrutiny. As the hon. Member for Nottingham East pointed out, they are to be made by affirmative procedure. He welcomed that, as is traditional from those sitting on the Opposition side of the Committee.

It is precisely because we are mindful of the need to have regard to the convenience of the taxpayer that the regulation-making power is needed. Without it, it would not be possible to improve the current procedures in this area, provide certainty for taxpayers or reduce compliance burdens.

The requirement on HMRC to have regard to accessibility and the convenience of taxpayers is something with which we can all concur. The hon. Gentleman suggests a wider look at online forms. The power in the clause is limited to forms that apply where income tax is deducted at source. Review of new or amended forms will, of course, be undertaken at the relevant time, when we deal with those points.

The hon. Gentleman raises a fair point about the importance of convenience and accessibility, but adding such words to the Bill, particularly given that they are not defined, would not add anything useful to the clause, so I hope that he will agree to withdraw the amendment. However, he is right to highlight the need for forms produced by HMRC to be as accessible and convenient as possible, and I think he particularly united the Committee when he highlighted an instance where that does not always happen.