Clause 54
Finance (No. 2) Bill
2:45 pm
Paul Goodman (Shadow Minister (Childcare), Treasury; Wycombe, Conservative)
I am grateful for your guidance, Sir John. Because no Minister has had the opportunity to speak to clause 54, we are in the correct but slightly difficult situation of having to explain a little about the clause in order to make sense of the amendments. Without pre-empting the clause stand part debate, I want to outline the context, which is that the measures set out in clauses 54 to 58 aim to prevent the exploitation of charity tax reliefs. No doubt, in due course, the Paymaster General will make the case for them. To make part of her case for her, the measures have been welcomed by the Institute of Fundraising, the National Council for Voluntary Organisations and the charity finance directors group.
We understand the Government’s concern about such exploitation, and support in principle efforts to prevent it from taking place, as do other organisations that have commented on the clauses, such as the Charities Tax Reform Group, The Law Commission and the Chartered Institute of Taxation. However, and in such matters there is nearly always a “however”, those latter organisations are concerned about the clauses both because some innocent transactions might inadvertently be caught by them and because they will add unnecessary complexity to the tax system. In addition, they fear that those two factors could cause a reduction in charitable activity, which I am sure is not the Government’s intention. In short, we might have another example of the law of unintended consequences.
It is worth noting that Ministers do not claim that the clauses are incapable of improvement, given that they have tabled two amendments—Government amendments Nos. 62 and 63—that seek to plug the gaps in the proposed clauses. Government amendment No. 63, in relation to housing associations, is particularly important in that regard. Our amendments are essentially probing amendments. They seek to lessen the risk of innocent transactions being caught by the clauses and to reduce complexity.