Clause 38 - Admissibility of certain

Finance Bill – in a Public Bill Committee at 3:00 pm on 20th May 2003.

Alert me about debates like this

Question proposed, That the clause stand part of the Bill.

Photo of Stephen O'Brien Stephen O'Brien Shadow Paymaster General

The clause relates to the admissibility of certain statements and documents. I want to place on the record the concerns expressed by the Institute of Chartered Accountants in England and Wales. We have not tabled an amendment, but if issues surface in the light of the Economic Secretary's remarks, further consideration may be given to the clause on Report.

The ICAEW states:

''Clauses 38, 98 and 203 are all related to the difference in treatment accorded to direct and indirect taxes and the existence of the hitherto clear Hansard procedure for direct tax which precluded criminal prosecution where a successful negotiation of civil penalty and full disclosure has been made.

We believe the reservation of the right to use information obtained in the process of a successfully negotiated civil settlement without adequate safeguards is contrary to the Human Rights Act 1998 and contravenes the Human Rights Convention.''

We have discussed the matter before and the Economic Secretary has revealed why he believes that our concerns are not founded. It is nevertheless helpful to put the concerns on the record and it will be interesting to hear what he has to say. ICAEW goes on:

''Information obtained as part of a settlement should be inadmissible and a taxpayer who has successfully agreed a settlement should be free from the fear of criminal prosecution unless he has broken the requirements of disclosure. Clause 203 has, we feel, removed the certainty given in the House last November in respect of Hansard. Clause 38 replicates the existing anomaly within section 60(4)''

of the Value Added Tax Act 1994. My hon. Friend the Member for Hertford and Stortford (Mr. Prisk) will discuss clause 98 when we get the chance to debate stamp duty land tax.

The ICAEW concludes:

''Lastly in this respect we have long sought to have a 'joined up' approach whereby a disclosure for the purposes of one tax will be accepted as a disclosure for all taxes provided the taxpayer makes it clear at the time the disclosure is made. This would be an ideal opportunity to introduce this simple but significant improvement to the civil penalties regime.''

On the basis that I outlined earlier, I look forward to the Economic Secretary's reply.

Photo of John Healey John Healey The Economic Secretary to the Treasury 3:15 pm, 20th May 2003

The hon. Member for Eddisbury has recognised why I believe that the safeguards are adequate across the piece. On the particular point that he raised on behalf of the ICA, the legislation is designed to ensure that in cases in which the taxpayer deliberately misleads Customs and Excise investigators while purporting to assist them following an inducement offer and the deception is subsequently discovered, any evidence collected may be used in a subsequent prosecution. The rule is not designed to promote admissibility; it is a provision to remove a possible bar.

There is a major safeguard for the taxpayer: the decision whether such evidence is admissible will rest with the trial judge, who will be guided by the provisions of section 78 of the Police and Criminal Evidence Act 1984.

Question put and agreed to.

Clause 38 ordered to stand part of the Bill.

Clauses 39 and 40 ordered to stand part of the Bill.