Clause 83 - Giving through the self-assessment return
Finance Bill
10:30 am
Mr Andrew Tyrie (Shadow Minister, Economic Affairs; Chichester, Conservative)
I will go at just the right speed and if the Economic Secretary thinks that I am going too fast, he should nod his head or make some gesture. What are the criteria for going on the list? I have not seen them spelled out anywhere. Who is policing the list? About 35,000 charities are on it, so it would be helpful to know what those criteria are.
There are a number of concerns about large, one-off repayments. Prudent taxpayers may want to be generous but may not necessarily want to give all of a large, one-off repayment to a charity, so they will set a limit. Can the Minister consider highlighting the possibility of a limit on the tax return? I have a copy of the guidance in the tax return that is being sent out, which has already been amended to take account of the clause. In order to save time, I shall not read the relevant passages out, but a very long way down, my concern is highlighted—perhaps that is too strong a word—by the paragraph that begins:
''Do you want to nominate a charity to receive all or part of your repayment?''
That must be flagged up. Can the Economic Secretary take a careful look at it? When he has done so, he may agree with me that it must be higher up in the text. We want people to give, but not more money than they might have intended. We do not want them to make a large, one-off payment when they wanted to give only part of it. The fact that the text is tucked away so low will play into the hands of those who have advisers, who will certainly recommend a limit as a matter of course, whereas those who are unadvised and are using self-assessment returns will not.
There is the important question of mistakes. When, as inevitably happens from time to time, a repayment award is made in error—even the Inland Revenue makes occasional mistakes—that money presumably goes to the charity, and the error is discovered. What happens then? I understand that the intention is that the Inland Revenue will claw that money back from the charity, which, in certain circumstances and with certain charities, will be difficult. That raises a number of questions. How in practice will that be accomplished by all 35,000 charities? Are those
charities vetted to get on the list of those that have the financial capacity to make repayments that have been made in error?
Secondly, will the Inland Revenue assure us that it will not go back to the taxpayer for that money? Thirdly, in any case, will the taxpayer not need to be informed? If he is a higher rate payer, he will need to know so that he can claim higher rate gift aid tax relief. He must be told.
Fourthly, when the error is by a taxpayer, the Revenue will of course want to recover the money from them as it already does when money is paid to a nominee. In the case in question, the money is to a charity, and it might be asking a lot of a taxpayer to refund in those circumstances. I understand why the Revenue would want to enforce that, but I can see some problems ahead.
When I considered the issue of mistakes, I concluded that not all the angles of the clause had been thought through. I have raised several questions and I ask the Economic Secretary to consider them, even if he cannot answer them now.
I have a few more questions.