Clause 54 - Gifts of medical supplies and equipment
Finance Bill
10:00 am
Mr Paul Boateng (Financial Secretary, HM Treasury; Brent South, Labour)
The clause introduces a new relief for corporate donations of medical supplies and equipment. It removes a potential tax charge on corporate donations of medical supplies made for humanitarian purposes and allows companies to deduct from their taxable profits the cost of transporting, delivering and distributing those goods. From 1 April, the new relief will encourage companies to donate medicines, medical supplies and equipment to developing countries without incurring a tax charge and in the full knowledge that the cost of getting donations to recipients will be tax deductible.
This debate, engendered by the new clause, has been helpful, and I shall try to answer the points that have been raised. We want the provision to be enabling rather than regulatory. It would have been possible to take the approach suggested by the hon. Member for Arundel and South Downs and introduce a raft of regulations, but we chose an enabling approach, which was favoured in the representations that we received from the charitable sector and from industry. It maximises the flexibility of such bodies in determining how best to respond to the sort of philanthropic impulse outlined by the hon. Member for Epsom and Ewell (Chris Grayling) in his interesting example. Provided that companies comply with the requirements of the clause and the gift is made for humanitarian purposes, donors and recipients will have the assurance that gifts of medical supplies and equipment can be made without the donor suffering a tax charge.
The hon. Member for Arundel and South Downs favoured a different approach, whereby tax relief would be available only for goods given in accordance with regulations made by the Secretary of State. I do not understand why anyone would want to increase the burden of regulation, especially in this area. Instead of a clear enabling measure that will help willing donors and recipients to get together, the hon. Gentleman's approach would restrict relief to defined gifts in defined circumstances. In fact, it goes against the thrust of the argument of the hon. Member for Epsom and Ewell, and I shall return to his interesting point in a moment.