Clause 32 - Supplementary
Tax Credits Bill
6:45 pm
Professor Steve Webb (Northavon, Liberal Democrat)
I beg to move amendment No. 117, in page 21, line 30, leave out 'has effect' and insert—
'shall take effect on the laying by the Board before both Houses of Parliament of a statement explaining—
(a) how it will balance the need to encourage persons entitled to claim a tax credit to do so with the need to control abuse so far as is reasonably practicable,
(b) its criteria for deciding whether a claimant has been fraudulent or negligent, the manner in which it will exercise its discretion in cases of minor error, and its prosecution policy in relation to claims for a tax credit, and
(c) the relationship between these criteria and those relating to income tax and national insurance contributions,
following consultation on a draft of that statement.'.
I am being prompted by hon. Members on both sides of the Committee that a football match is due to start imminently, but I will not allow that to inhibit me from giving the exhaustive analysis of schedule 2 that I had planned.
We have been here before. The board has wide powers to impose penalties under schedule 2 as conferred by clause 32. We sought before to have guidance notes published and we should like the board to set out its approach to the imposition of penalties—the definition of negligence and so on—so that claimants know where they stand.
I will give an example of a grey area. Clause 29, which deals with one set of penalties, explicitly states that if one member of a couple did not know what the other was up to, he or she is not deemed culpable for that. However, that exemption is not explicit in clause 30. Someone is let off the penalties for incorrect statements if they did not know what their partner was up to, but it is not clear whether that applies to the penalties for not complying with requirements.
We seek a consistent statement, in the code of practice produced by the board if not in the Bill, that explains how the board will approach those issues. The penalties are quite serious, especially for the client group under discussion, and people might reasonably expect such a statement to be put in place before the penalty regime is imposed.