Clause 14 - Income tax deduction for payments to organisations
Finance Bill
6:30 pm

Question proposed, That the clause stand part of the Bill.

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Mark Field (Shadow Minister, Treasury; Cities of London and Westminster, Conservative)

Sir Nicholas, clause 13 might have been lucky for you, but I am afraid that clause 14 will not be so lucky.

I should like to say a few words on clause 13 first, if I may. We welcome the Government's commitment to consulting the scientific research organisation industry on the manner in which the regulations are dealt with and we endorse the need for some clarification in statute.

Clauses 14 and 15 are designed to ensure that payments by the taxpayer to such organisations as are prescribed in clause 13 shall be tax deductible for income tax and corporation tax purposes. I have two questions on which I should be grateful for an answer from the Economic Secretary. First, why cannot the particular form of scientific research organisation be determined in this Finance Bill, notwithstanding the process of public consultation that is being undertaken? Secondly, what representations have the Government received that have persuaded them to amend the terms of the Income Tax (Trading and Other Income) Act 2005 so soon after it has been enacted? I appreciate that there is sometimes schizophrenic activity on the part of the Treasury, but it seems incredibly quick to have enacted a piece of legislation only a few months ago and now to seek to amend its terms in this way.

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Ivan Lewis (Economic Secretary, HM Treasury; Bury South, Labour)

To respond directly to the hon. Gentleman's argument, there is consensus on the desirability of incentivising investment in science. This part of the Bill is designed to align the rules with our tax credits with which we are incentivising that investment.  

The hon. Gentleman asked for a definition of scientific research organisations. I understand that there are only nine SROs in the country. Historically, the Department of Trade and Industry has been responsible for them and we do not believe that it would be possible or desirable to be prescriptive about their definition at this stage in their development. Because the number of those organisations is relatively small, so we are anxious to consult them in some detail to ensure that we get the regulations absolutely right. We therefore did not think that it was appropriate in the Bill to be prescriptive in our definition.

Mr. Field rose—

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Ivan Lewis (Economic Secretary, HM Treasury; Bury South, Labour)

I shall give way to the hon. Gentleman so that he can remind me of the other point that he was making.

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Mark Field (Shadow Minister, Treasury; Cities of London and Westminster, Conservative)

In fact, I was grappling with my papers and am only glad that I did not pass them to the Clerk. The other question that I sought to ask in a characteristically articulate way was about the representations that the Government had received that had persuaded them that the terms of the 2005 Act should so quickly be revised.

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Ivan Lewis (Economic Secretary, HM Treasury; Bury South, Labour)

I was just testing the hon. Gentleman. It is a consequential amendment to ensure that the position of contributors will not be unchanged. There would be an inconsistency if we did not make the change at this stage and individuals and corporate donors to SROs would be left in an invidious position. So in changing the rules to benefit the organisations, it is entirely right that we clarify and simply the rules that apply to individuals and companies that receive tax deductions as a consequence of their donations to those organisations.

Question put and agreed to.

Clause 14 ordered to stand part of the Bill.

Clause 15 ordered to stand part of the Bill.