Clause 22
Finance (No. 2) Bill
4:15 pm
Mark Francois (Shadow Minister, Treasury; Rayleigh, Conservative)
Very briefly—[Hon. Members: “Hear, hear.”] It is always nice to be cheered on in any context. The clause is perhaps more minor than some of the others that we have debated today. As the explanatory notes explain:
“The clause allows HM Treasury to amend schedule 10A to the Value Added Tax (VAT) Act 1994 by affirmative resolution order to specify circumstances in which the supply of credit vouchers is not to be disregarded for VAT purposes.”
In essence it is an anti-avoidance measure which appears to be aimed principally at attempts to redefine items such as phonecards as credit vouchers in order to minimise the VAT liability. The note goes on to stress that this is a limited power in that
“This power is intended to help combat VAT avoidance schemes which seek to exploit the fact that credit vouchers are not normally subject to VAT, and to discourage avoiders from implementing new schemes. This clause is also intended to leave businesses unaffected where they are not avoiding VAT: it does not change the basic credit voucher rules, but allows the Government to take targeted action against specific kinds of VAT avoidance, if the need arises.”
In that sense, the clause seems reasonable. This afternoon, we have been pressing the Government for reassurance on several areas, but on this occasion it is provided directly in the explanatory notes.
The Law Society has raised one minor technical matter; it has one small quibble. It has stated:
“We recommend that clause 22 makes it clear that HM Treasury cannot specify circumstances in which sub-paragraph (2) does not apply where transactions of the type in question have been the subject of a taxable supply in another Member State.”
Provided the Paymaster General can give a brief, snappy answer to that point, we have no objection to allowing the clause to stand part of the Bill.