Powers to obtain information about certain tax advantages

Finance Bill – in a Public Bill Committee am 3:30 pm ar 7 Gorffennaf 2016.

Danfonwch hysbysiad imi am ddadleuon fel hyn

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

With this it will be convenient to discuss the following:

That schedule 24 be the Twenty-fourth schedule to the Bill.

Clauses 169 and 170 stand part.

Photo of Rebecca Long-Bailey Rebecca Long-Bailey Shadow Chief Secretary to the Treasury, Member, Labour Party National Executive Committee

These clauses give HMRC the power to collect and publish data relating to claimants of certain tax reliefs listed in schedule 24; I will not detail them all. The aim is essentially to make it easier for the European Commission to assess whether any such reliefs constitute state aid, in accordance with relevant EU obligations that commence on 1 July 2016. Information will be published only for beneficiaries who are in receipt of aid above €500,000, and the specific amount of tax advantage will not be published.

State aid is defined by the European Commission as

“an advantage in any form whatsoever conferred on a selective basis to undertakings by national public authorities.”

We do not have any issue with the principle behind the clauses—despite the obvious question of whether they will all need to be repealed in a few years’ time—but I have a question about clause 170(3) to (5), which allows the Treasury to amend the list of reliefs in schedule 24 by statutory instrument made under the negative procedure, meaning that it will not be debated. That raises the issue of scrutiny. Under what circumstances will the list be updated? I hope the Minister can provide some clarity on that. However, overall there does not appear to have been much reaction to the measures in these clauses, and we will not oppose them today.

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

Clauses 168 to 170 and schedule 24 introduce new powers to allow HMRC to collect information on certain tax reliefs and exemptions. They will allow HMRC to improve its ability to monitor and evaluate the effectiveness and value of those reliefs, which constitute state aid. The powers will also allow some of that information to be shared with the European Commission through a legal gateway and published on a public website.

Improved the monitoring and evaluation of state aid provided to UK businesses via tax reliefs and advantages is a sensible step forward. It may help if I provide hon. Members with some background. State aid is an advantage granted to an undertaking by public authorities through state resources on a selective basis. The Government support improved monitoring and evaluation of aid, to ensure that tax reliefs or advantages are well targeted and of value to the UK.

The provisions will allow HMRC to determine what information should be included in any claim for tax relief, to collect information from relevant persons in receipt of state aid and to publish and disclose relevant information about state aid received by beneficiaries. The changes will only affect UK businesses in receipt of state aid in the form of certain tax reliefs, and we will engage with those affected to ensure that they are ready.

On clause 170(3) to (5), the secondary power provides for the Treasury to amend the list in schedule 24 under the negative procedure. That secondary power will be exercised only if the list of tax reliefs needs to be changed, for instance to remove entries from the list or to vary an entry. That may happen if the tax relief or tax advantage is withdrawn, or if the state aid requirements no longer apply to it. The new powers will allow HMRC to monitor and evaluate the state aid it administers and ensure that the reliefs involved are delivering value to the United Kingdom. I therefore hope the clauses and schedule will stand part of the Bill.

Question put and agreed to.

Clause 168 accordingly ordered to stand part of the Bill.

Schedule 24 agreed to.

Clauses 169 and 170 ordered to stand part of the Bill.

Clause 171