Clause 41 - Reallocation within group of gain or
Finance Bill
10:45 am
Ms Ruth Kelly (Economic Secretary, HM Treasury; Bolton West, Labour)
I hope that the hon. Gentleman accepts the principle that companies should not be able to restructure in order to avoid legitimate tax being paid. It is right in principle to collect that tax regardless of the time period involved. The six-year rule is a reasonable balance between the competing tensions of the need to collect tax and minimising compliance burdens on business. It does not inhibit commercial transactions because it is about providing companies with greater flexibility.
As I said, businesses need to keep tax records for that length of time. Significant technological advances mean that it is easier than in the past to keep records and track asset transfers, and that that not a significant burden on companies. If companies come to us with evidence that it is a significant burden, we shall obviously think of ways in which to reduce the compliance burden further. However, I do not see it as an impediment to business.