Clause 30 - Charge and main rate for financial year 2003
Finance Bill
2:30 pm
Mr Howard Flight (Arundel and South Downs, Conservative)
I beg to move amendment No. 7, page 22, line 3, at end add—
'(2) In respect of that and subsequent financial years, if the retail prices index for the month of September preceding a financial year is higher than it was for the previous September, then, unless Parliament otherwise determines:
(a) section 13(3) and section 13AA(4) of the Taxes Act 1988 (''the relevant provisions'') shall have effect for that year as if for each of the amounts specified in the relevant provisions as they applied for the previous year (whether by virtue of this section or otherwise) there were substituted higher amounts;
(b) such higher amounts shall be arrived at by increasing the respective amounts for the previous financial year by the same percentage as the percentage increase in the retail prices index; and
(c) if the results are not (in the case of section 13(3) of the Taxes Act 1988) multiples of £10,000 or (in the case of section 13AA(4) of the Taxes Act 1988) multiples of £1,000, rounding them up to the nearest respective amounts which are such multiples.'.
I welcome you to the Chair, Mr. Gale. We now come to more technical clauses and schedules. We have done our best, with the support of lawyers and the Clerks, to draft our amendments correctly. I apologise if they are not perfect, but the points are there to be made.
We welcome the latter provisions in clauses 31 and 32 to assist smaller businesses, but amendment No. 7 covers the obvious point that without indexation of smaller-company tax rates, the reality in trading and profitability terms is that the size of businesses that qualify for those tax rates will become smaller and smaller. Not to index them is a form of stealth tax if one believes in giving smaller companies fiscal advantages. Amendment No. 7 is straightforward and would index the limits by reference to which mainstream and starting rate corporation tax is calculated, so avoid the inadvertent effect that I have described.