Clause 32 - Temporary non-residents
Finance Bill
11:15 am
Richard Spring (Shadow Minister, Treasury; West Suffolk, Conservative)
The Advocate General made such a decision and the state of the matter in terms of its implication is still to be established. I hope that the hon. Gentleman will agree—I mean this dispassionately—that we have to deal with the potency of EU jurisprudence in our national law and our raising such an issue now is of huge importance.
Under EU law, anti-avoidance legislation must be specific and not aimed generally at all situations. It could be said that clause 32 catches all situations, including when the intention was not to avoid tax. It might, for example, catch a worker who moved to an EU country for up to five years to undertake employment in that country with no intention to avoid tax. A provision that interferes with one of the fundamental freedoms can be justified by a member state on the grounds that its aim is to tackle the avoidance of tax as long as it is sufficiently targeted. A rule such as section 10A seems to deem all emigration to be tax motivated, which, if considered too broadly targeted, opens it up to EU law attack. We must be sure that the Government are robust and clear about the impact of clause 32, in view of the jurisprudence and potential actions of the European Court of Justice.