Clause 24 - Companies carrying on businesses of leasing plant or machinery

Part of Finance Bill – in a Public Bill Committee am 5:30 pm ar 12 Mehefin 2012.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of David Gauke David Gauke The Exchequer Secretary 5:30, 12 Mehefin 2012

I am grateful for the hon. Lady’s questions. She asked about consultation, and to a large extent, answered her own question by making it clear that this is anti-avoidance legislation. Such measures have a risk of forestalling, and the Government have taken many steps to increase the amount of consultation and the publication of draft legislation. By and large, most draft legislation is published in November and December in advance of the Finance Bill the following year, which gives interested parties an opportunity to analyse it and draw HMRC and the Treasury’s attention to any unintended consequences or weaknesses in the drafting. That step taken by the Government has been widely welcomed, and it has contributed towards an improved quality of legislation.

However, there are difficulties with anti-avoidance measures because of the danger of forestalling. Publishing a measure for consultation without bringing an anti-avoidance measure into effect can, in some circumstances, put tax at risk. Having said that, even when the Government have been required to act quickly, we have been willing to listen and take action where necessary in response to any concerns that have been expressed.

We are content that the measure is appropriately targeted. It is supported by the shipping industry, which is content with the clause as amended by amendment 15, and amendments 16 to 22. The measure effectively targets the avoidance risk and will not have an impact on commercial situations, which means that we now have the appropriate legislation.

In answer to the hon. Lady’s question about cost, or rather, the additional revenue that will be raised, we are talking about small sums of money. We are not making great claims. The impact assessment suggests that it is a negligible sum. It is more about protecting revenue in future, rather than bringing in additional sums. However, although the measure is designed more for revenue protection than anything else, it is none the less important that we protect revenue where we can.

The hon. Lady also asked about the scale of the impact and the number of companies that are likely to be affected, but I cannot give her the precise number. The provision only protects revenue, rather than raises additional sums, so it is difficult to make a precise assessment of the numbers that are likely to be affected. However, if I am able to provide additional information, I am happy to write to her and provide further clarification.