(Except clauses 1, 3, 7, 8, 12, 20, 21, 25, 67 and 81 to 84, schedules 1, 18, 22 and 23, and new clauses relating to microgeneration) - Clause 34
Finance Bill
10:30 am
David Gauke (Shadow Minister, Treasury; South West Hertfordshire, Conservative)
First, may I reiterate a point made by my hon. Friend the Member for Chipping Barnet about the date of publication of the consultation document on the taxation of foreign profits? I know that there is considerable interest in that document, particularly in the City, and it would be helpful to know when it will be published.
Secondly, may I press the Chief Secretary on whether the clause is merely a clarification of the current law or a change? The reason I ask that question is that when flicking through the explanatory notes I found that such is the insistence that the provision is a clarification and no more that it is difficult not to be suspicious. We are told that the clause confirms that foreign tax
“includes UK tax for which double taxation relief is claimed.”
The explanatory notes go on to state that subsection (2) removes “any doubt” about that particular matter; subsection (3) “removes any doubt”; subsection (5) is a “clarification”; subsection (6) “makes it clear” that a particular point is the case; and finally, the background note states:
“The amendments put it beyond doubt that ‘foreign tax’ in this context includes UK tax.”
Such is the Treasury’s insistence on that point in the explanatory notes that one cannot help but being a little suspicious.
It is particularly important that the measure is a clarification and no more, in part because the commencement is backdated to 6 December 2006—the date of the pre-Budget report. I assume that an announcement of such measures was made at the same time. Given that it is in a sense backdated, it clearly should be a clarification and no more. Will the Chief Secretary confirm that the current law really does intend that UK tax should be treated as foreign tax for those purposes, that the Government are not simply trying to change the law to address a genuine loophole that had not been addressed, and that that is not a new point?