Clause 230 - Self assessment: withdrawal of notice to file etc

Finance Bill – in a Public Bill Committee am 3:45 pm ar 20 Mehefin 2013.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Sir David Amess Sir David Amess Ceidwadwyr, Southend West

With this it will be convenient to consider that schedule 49 be the Forty-ninth schedule to the Bill.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

We now come to one of the Bill’s final substantive clauses. I know that that fact will disappoint many members of the Committee, and they might be even more disappointed to hear me say that the Government are proposing quite a common-sense change. I am surprised that such a measure did not already exist, but apparently HMRC needs to clarify that it has a power to withdraw a notice to file a self-assessment tax return for individuals, partnerships or trustees when it agrees that the return is not required. I am surprised that there has to be legislative provision for such action.

The clause is perfectly sensible, and I do not have any qualms about it, but it gives rise to one question. The Minister might not have the figures at his disposal, but he will recall that the Government are making changes to child benefit for higher rate taxpayers, involving a sliding scale for income up to £60,000. One of the complicated ways in which that has been implemented is to require individuals either to opt out of child benefit, or to register for self-assessment. A lot of people will not have registered for self-assessment. Some might forget to do so, but I think that there is a point at which they must register or be prone to penalties. Will the Minister update the Committee on how many individuals or families have—in the middle of June 2013—registered for self-assessment? If he does not have the figure to hand, it would be helpful if he would write to us about it.

Photo of David Gauke David Gauke The Exchequer Secretary

I am grateful for the hon. Gentleman’s support. He asks whether legislation is really needed. HMRC is already using its discretionary powers of collection and management to deal with such matters, but that is a temporary expedient. A statutory provision will put such an approach on a sustainable, long-term footing, and that was welcomed in the consultation process.

The hon. Gentleman also raises the broader issue of child benefit. He can correct me if I am wrong, but I understand that the Labour party now supports our belief that child benefit should be targeted at those who need it most.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

The Minister is so eager that when he sees a comment that recognises that such a provision will be an unfortunate change to the tax system, he reads into it that we wholeheartedly support the policy. I do not like the way in which the Government have gone about the particular change to child benefit, but we have to be realistic. We cannot wave a magic wand and promise to undo it straightaway, which was unfortunately how the Conservative party worked when it was in opposition.

Photo of David Gauke David Gauke The Exchequer Secretary

Perhaps the Labour party is finally recognising some of our arguments on this point. I am grateful for the hon. Gentleman’s confirmation. I fully understand the position of the Labour party. When there is a deficit to bring down, paying child benefit to our respective families should not be a priority, and I am glad that that has finally been recognised.

The hon. Gentleman is right that we are using the tax system to ensure that resources are focused on where they are most needed. He is also right to say that there are, essentially, two options available: people can opt  out of receiving child benefit, or the high earner can ensure that he or she is in the self-assessment system and declare the information. He is right that a number of people will need to register for self-assessment, the deadline for which is October. I cannot give him any numbers this afternoon, as I am sure he would expect, given that we had no notice of the question. We will set out the numbers of people who have registered for self-assessment as a consequence of the policy in due course, but our estimate is about 350,000. We anticipate that most of those will register in the run-up to the October deadline. I assure him that HMRC will take a number of steps to publicise the requirement. There was a considerable amount of publicity earlier in the year, when people were informed about the need either to opt out of child benefit, which many did, or to register for self-assessment, but further steps will be taken to publicise that in due course.

Photo of Catherine McKinnell Catherine McKinnell Shadow Minister (Treasury)

The Minister is helpfully setting out the number of people who will be brought into the self-assessment system as a result of the policy. Can he also tell us the cost associated with that?

Photo of David Gauke David Gauke The Exchequer Secretary

I do not have the numbers to hand. We have been open about the cost of administering the policy, which is a small fraction of the money that will be saved as a consequence of it. Our estimate of the cost has fallen over time because more people opted out of receiving child benefit than we had originally anticipated. That number is certainly available on the public record. Rather than hazard citing a number that might be incorrect, I shall simply say that it is publicly available and I have not had any updates on it since the matter was discussed previously.

Photo of David Gauke David Gauke The Exchequer Secretary

I was going to conclude my contribution, because I have been drawn into an area that is not strictly relevant to the clause, but I will give way, once again, to the hon. Gentleman.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

I just want to button down the point. The Minister says that the figures are in the public domain or will be released in due course, but will he write to us to put them on record so that we can take a snapshot of the situation now—in June?

Photo of David Gauke David Gauke The Exchequer Secretary

I am quite happy to let the hon. Gentleman know the most up-to-date numbers, but I am not aware of any changes since the previous time he asked me that question. In due course, we will make available information on the number of people who have registered for self-assessment so far. I am not sure that we have all the information we need at present, but I assure him that we will make the figures available.

Question put and agreed to.

Clause 230 accordingly ordered to stand part of the Bill.

Schedule 49 agreed to.

Clauses 231 and 232 ordered to stand part of the Bill.