Clause 30 - Provision not at arm's length: transactions between UK taxpayers
Finance Bill
11:15 am
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
That difficulty arises because clauses 30 to 37 pick up each of the different points that have been identified, be that securitisation or the role of small and medium-sized companies and whether they require transfers within groups. All those matters are dealt with as we progress through the clauses. I have noted the hon. Gentleman's point, and I am sure that he will make it again on the relevant clause. Certainly I want to make it clear as we progress through these clauses that the Government are taking all possible steps and will require consultation with business.
Finally, I stress to the Committee the fact that groups can adopt arm's-length principles. There is no need to restructure; it is not a requirement. Some may choose to do so. The hon. Member for Hertford and Stortford mentioned companies in his constituency. Companies are already trading across borders. They are already coping with the operation of transfer pricing and the arm's-length principle. They use it daily in running their businesses within their groups of companies both in the UK and across borders.
The Committee must keep focused on the principles of transfer pricing and why they need to be arm's length. This is not about investment, but about profit and where it occurs. It is a very compact set of principles, internationally accepted and well operated by the UK. They are principles that can be established on a UK-to-UK business, but we need exceptions and we need to assist small and medium-sized companies. I will return to that when we resume this afternoon.
It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.
Adjourned till this day at half-past Two o'clock.