Schedule 24 - Creative artists: relief for fluctuating profits
Finance Bill
9:30 am
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
I shall deal first with the style of the rewrite of section 96 of the Income and Corporation Taxes Act 1988. Hon. Members referred to the scheme that operates for farmers. Schedule 24 is written in the tax law rewrite style because it introduces the new scheme for creative artists, which has been widely welcomed by the Committee and by representative bodies. The rewrite arose out of the need to deal specifically with creative artists. The scheme that it succeeds was not well used, no doubt because of its complexity.
I hear what the hon. Member for West Dorset (Mr. Letwin) says when he asks why we did not rewrite the provisions for farmers, and the tax law rewrite project is examining that. However, we are simply replacing one scheme with another as opposed to an update—it would merely be a rewrite of what is working well for farmers. None the less, I am sure that we would all agree that the tax law rewrite style is vastly superior. I take the point about rewriting the scheme for farmers. We did not do that on this occasion, as will be appreciated by the hon. Members for West Dorset and for Torridge and West Devon (Mr. Burnett)—I can get the county, but I always hesitate over whether or not it is west, for which I apologise. We have been focusing on other issues; especially with regard to the difficulties farmers are experiencing with foot and mouth disease. This part of the Bill is not the place to deal with farmers' difficulties. I have listened carefully to the points made by hon. Members about what measures are necessary to assist farmers and I will certainly examine them.
The tapering is quite straightforward. The Chartered Institute of Taxation made a similar point—without the tapering a cliff-edge would be created between those entitled to averaging and those who are not. The same tapering rules are in use for farmers and have been used without difficulty, notwithstanding the points that the hon. Gentleman made about other difficulties that farmers are experiencing. Again, the Government are always prepared to examine arguments, but we were not persuaded on this occasion. None the less, I shall bear in mind the points made by the hon. Gentlemen.
On provisional claims, the hon. Gentlemen answered their points themselves, because averaging is a composite claim affecting two years, not just one. Therefore, to adjust liabilities on the second year on expectation—before the tax year was completed—would bring complications, if not unfair treatment, compared with other methods. The averaging principle, which we all agree is good, is therefore the right one to operate. The provision has been widely welcomed. It is narrow and specific in its application to creative artists, but, none the less, I shall consider again the points made by the hon. Gentlemen. On previous Finance Bill Committees on which I have served, Dr. Clark, you have that seen that I keep my word. When I promise to consider something again, I do so, and the Government would, of course, make the necessary judgments.