Schedule 17
Finance Bill
5:45 pm
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
I want to raise a concern about the amendment. The Minister says that it deals with an erroneous repeal in last year’s Bill, but representations that I have received suggest that the repeal in last year’s Bill was actually correct and the repeal this year is erroneous. That sounds a very complicated position to be in.
The amendment relates to a case that has been before the special commissioners in which it was ruled that the position in law as it was after last year’s repeal was correct, and that the life company could carry forward losses for periods ending before 31 December 2002. That relief is available to all other corporation tax payers.
With the amendment, we appear to have a question of policy rather than the simple undoing of an accidental repeal. On that basis, there is concern that it should have been subject to the normal level of consultation and scrutiny rather than simply being treated as a correction of an accidental repeal.
The case involves an insurance company, and the special commissioners found in favour of the insurer. I understand that the decision is subject to an appeal in the High Court later this year.
The amendment goes slightly beyond correcting an accidental repeal to a policy decision and actually overrides the decision reached by the special commissioners. In the light of current litigation, I wonder whether there should be some proper consultation between the Treasury, Her Majesty’s Revenue and Customs and the industry as to what the position should be.