Clause 12
6:45 pm
Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)
Subsection (2) enables regulations to be made treating any sums wrongly paid as tax charged in an assessment for the purposes of part VI of the Taxes Management Act 1970. It permits regulations to be made allowing HMRC to collect those sums in the same way that it collects sums of tax due, using the provisions relating to collection and recovery of tax that are contained in part VI of the Taxes Management Act. The power is exercised in paragraph (5) of draft regulation 20. The situation is as my hon. Friend alludes to. He rightly raises the probing question about whether we are applying tax legislation to the recovery of those amounts and why, because they are not tax.
In practice, any sums that are to be recovered by HMRC in relation to saving gateway accounts will be dealt with by the same staff who recover HMRC debts generally. The application of part VI of the Taxes Management Act allows those staff to make use of the normal collection and recovery powers used to collect tax. The same approach, of treating sums to be recovered for the purposes of part VI of the 1970 Act as though they were tax due, is also used, for example, when recovering sums in relation to child trust funds and tax credits. My hon. Friend rightly makes a number of points about those areas. What we are doing is regarded as quite normal, but obviously we hope that the situations in which the overpayments might arise will be extremely few.