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Offshore Receipts in Respect of Intangible Property

Part of Finance (No. 3) Bill – in the House of Commons at 5:45 pm on 20th November 2018.

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Photo of Eddie Hughes Eddie Hughes Conservative, Walsall North 5:45 pm, 20th November 2018

It is a pleasure to follow Helen Goodman, although I have to say that the contribution from Alison Thewliss was the speech by an Opposition Member that most excited me, not least because I wrote a paper on blockchain for the think tank Freer, where I considered the merits of the technology and how it might help us to improve the efficiency of government. I am delighted to say that on Thursday I am going to have lunch with Dr Craig Wright, one of the people associated with the creation of bitcoin, which celebrated its 10th birthday recently. I understand that the Government and the Treasury Committee have given some consideration to the use of crypto-currencies and crypto-assets and how they might be appropriately governed in the future. That is the job of the Government. They have to keep pace with improvements and diversity in technology and understand where money is being used and created, to make sure that their tax take is optimised while observing the general principle of low taxation. The second Roman emperor, Tiberius, said that a good shepherd shears his sheep but does not skin them. I think that is an appropriate maxim for us to follow, but sometimes the Government’s problem is that they need to find the sheep in order to shear them.

The average income in my constituency is £27,000. People there do not employ complicated tax procedures, so as I speak in support of clause 15 and schedule 3 on offshore receipts from intangible assets, my constituents will be confused about what that means. To help us with the definition of intangible assets, my hon. Friend James Cartlidge referred to the Bill, which says that intangible assets are any assets that are not tangible. Clearly, we could do with a better definition than that, or at least a better understanding. My constituents in Bloxwich and Willenhall will be mildly confused by the idea that a company that generates sales and therefore profit in the UK would be able to offshore some element of that income and attribute it to intangible assets. I think they would consider inappropriate the idea that the copyright of a product could be used to take money offshore, thereby reducing the tax that a company incurs. That is why, even though they might not understand the complexity of it, my constituents will be delighted to tune in to this debate and see that the Government are taking action to clamp down on tax avoidance.

As I say, my constituents might not understand the complexity, but they do understand that a Conservative Government is generally on their side. My understanding is that in 2010 the threshold above which people paid tax was roughly £6,500; now, thanks to the benefits introduced recently by this Government, that threshold will rise to £12,500. People in my constituency will be £1,250 a year better off as a result of the measures taken by the Government. When they look at this debate, they will want to know what benefit will be provided by this new scheme to clamp down on tax avoidance. My understanding from the figures that have been produced is that in the first year, 2020-21, the Government hope to take £457 million more in tax. My constituents will be pleased about that, of course, but they will be delighted that the Government have already signalled a direction of travel, saying that they will put that money into things like additional spending on the NHS. My constituents might not understand the complexity of intangible assets, but they will know that, because the Government are clamping down on tax avoidance, they will have greater investment in the NHS.

My constituents will also know that the Government are keeping track of the way people buy houses. For example, there has been an increase in demand for shared ownership properties. People who have bought such properties recently will be delighted that the Government have announced that stamp duty relief for first-time buyers will be extended to those people who buy properties on a shared ownership basis. My constituents are seeing a Government who keep track of changing behaviours in the corporate and personal worlds—of how people live and work and of how corporations operate—and make sure that their approach to the tax system is appropriate in both cases.

Hard-working members of the public know that the Government are doing everything they can to take as little tax off them as possible, allowing people to make choices about how they spend their money, while making sure that they can maximise the tax take from big corporates that operate internationally in a fair and appropriate way. That will make sure that the Government continue to deliver for those people who continue to vote Conservative.