Clause 71
Finance (No. 2) Bill
4:45 pm
Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
I shall refer to the question of issuing a notice, which amendment No. 100 covers. Issuing of notices is a general part of the disclosure requirement regime. HMRC would issue the notice when it believed that the conditions of the clause were met; however, companies need not be concerned by the provisions unless they receive a notice. That is the first step. The notice would be a possibility if conditions were met. Obviously, HMRC must be consistent when issuing notices, and such issuing must be based on cases to which it reasonably believes that the conditions of the legislation apply. The conditions requirement means the exercise of judgment, but that is inevitable for what is a purposive test. There is nothing unusual in that, and such judgment is called for in many other areas of tax law.
HMRC has also issued guidance, to which I referred when we discussed amendment No. 101 and clause 69. HMRC has issued guidance on how it will exercise judgment in relation to the legislation. We were discussing the informal clearance procedure, and HMRC has also offered clearance on an either pre or post-transaction basis. Clearly, however, if a company takes its own view during its self-assessment, and ultimately disagrees with the decision, it will be referred to a special commissioner for ruling before going through the normal processes. I am not sure that I made this point this morning, so I should add that having given that informal clearance, HMRC will be bound by it—as long as all relevant facts about the arrangement had been disclosed in the first place. I hope that that explains the procedures. The hon. Member for Wycombe asked, if a company nevertheless disagrees, can it challenge? The answer is yes.