Clause 31 - Exemptions for dormant companies and
Finance Bill
3:45 pm
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
I am happy to reassure the hon. Gentleman. The Inland Revenue recently issued guidance on the matter, which I hope will set hon. Members' minds at rest. Where a charity is acting in the normal way and pursuing its charitable objectives, it is not acting as an enterprise and so is outside the scope of the transfer pricing rules, which apply only to enterprises.
Only in exceptional circumstances, in which a charity is engaging in commercial activity with a view to profit or gain, would it cross the line and become an enterprise. Re-charging of expenses for the purposes of offsetting costs would not fall into that category. The guidance sets that out in greater detail and it is now available on the Inland Revenue website. I became aware of some concerns yesterday evening, and I hope that that absolute reassurance will put minds at rest. I hope that for those concerned I have provided clarification on the record, and I urge them to see the detail on the website, which they will find very helpful.
Question put and agreed to.
Clause 31 ordered to stand part of the Bill.