Building Societies

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 11th June 1992.

Alert me about debates like this

Photo of Peter Bottomley Peter Bottomley , Eltham 12:00 am, 11th June 1992

To ask the Chancellor of the Exchequer on what dates building societies objected to the unequal impact of the Income Tax (Building Society) Regulations 1986; and how many judicial reviews have ensued.

Photo of Mr Anthony Nelson Mr Anthony Nelson , Chichester

Building societies have raised this issue on a number of occasions. The 1986 regulations have been subject to judicial review, and further action is under way arising out of legislation last year.

Photo of Peter Bottomley Peter Bottomley , Eltham

Is my hon. Friend aware that there is unparalleled interference in the conclusions of the courts; that there is an unequal impact on building societies, whereby the Woolwich is separated from the Leeds, the Loughborough, the Greenwich and others; that it is unjust to treat people in different ways; and that that approach will be unsustainable when the matter gets to Europe? Would it not be a good idea if my hon. Friend and his colleagues got together with some of the affected societies and drew the sorry business to a conclusion? That would probably be done at a cost of less than £100 million out of the £15,000 million of taxation imposed on building societies over the past five years.

Photo of Mr Anthony Nelson Mr Anthony Nelson , Chichester

I understand why my hon. Friend feels that the regulations were unfair, but I do not agree with him. The matter was carefully considered during debates on section 53 of the Finance Act 1991 and Parliament accepted that the 1986 transitional provisions did not involve double taxation. What is now in question in the Leeds case is not transitional tax due from building societies but mainstream composite rate tax, for a number of years payable by all CRT payers. The Government are right to put that beyond question by confirming the intention of Parliament.