Schedule 6 - Accounting practice and related matters
Finance Bill
12:15 pm
Philip Hammond (Shadow Chief Secretary To the Treasury, Treasury; Runnymede and Weybridge, Conservative)
I am grateful to the Paymaster General. It might be considered slightly optimistic to say that the schedule builds on the Finance Act 2005. In fact it corrects the defects in that Act, which necessarily went through the House at great speed; all stages were conducted in a single afternoon. That probably underpins the point that we have tried to make; there really is need for extensive consultation with business on these matters. The Paymaster General herself spoke of the benefit that such a consultative relationship can have.
The bottom line is that although it may be sometimes tempting to think that all people who plan corporate tax schemes are simply trying to do the Treasury down, the truth of the matter is that they are anxious to keep the line between permissible planning and unacceptable avoidance clear. Provided that the Government’s intentions are not grossly unreasonable, if they make their end target clear the industry and the specialists will rally round and try to help them to devise legislation that is as narrowly focused on the Government target as possible. After all, it is in the industry’s interests to do so.
The problem, to which the Paymaster General alluded, is that because there is an emotion that we can perhaps only describe as paranoia surrounding this whole process, there is no pre-consultation. Announcements are sometimes made immediately prior to the Budget, with Budget day as the date when they come into effect. That results in everyone running to catch up, rather than quietly discussing the issues, assessing what the Government’s real policy objective is and helping the Inland Revenue and Treasury officials to draft effective legislation.