Clause 31 - Time limits for demands for penalties
Finance Bill
11:15 am
Mr Stephen O'Brien (Eddisbury, Conservative)
The clause specifies the time limits for issuing civil penalty demand notices. Although the principle of having such a clause is not disputed in relation to the technical process of the Bill, there is a
problem. The determination of the start date for calculating time limits for the raising of assessments or, as in the instant case, demand notices gives rise to considerable litigation and expense. It is our duty to seek to avoid that consequence flowing from statutory provisions as best we can. The method of calculating the start date for the time limits should be defined more closely to create some certainty for taxpayers. That is a principle that we seek to push forward throughout the consideration of the Bill.
The problem arises in a number of existing areas of tax legislation, and it is disappointing that in introducing a new civil penalty regime, no attempt has been made by the Treasury or Customs and Excise to address the issue. Continued reliance on case law is unattractive as it discriminates against small businesses that may not have ready access to the case law in question. I am well aware that many Committee members are concerned that small businesses do not find themselves with an added cost burden or discriminated against. There are a number of potential solutions to the problem that could be based on the principles surrounding case law, or perhaps by linking the start dates to the start of the financial year, thus requiring Customs to show only that the relevant conduct had been conducted at some stage during the financial year.
The aim of any principles adopted should be to reduce the need to argue about the specific dates on which conduct ceased, although consultation would be required to ensure a fair balance on the time given to Customs to pursue such matters. I have deliberately not proposed an amendment on the basis that the matter would benefit enormously from the Economic Secretary and the Government giving it further consideration, and taking consultation with business and advisors further. We look forward to what he has to say, but if it does not satisfy us the matter may resurface on Report.