Clause 41 - Intangible fixed assets

Part of Finance Bill – in a Public Bill Committee at 7:15 pm on 28 June 2005.

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Photo of Mark Francois Mark Francois Shadow Paymaster General 7:15, 28 June 2005

Thank you, Sir Nicholas. I spoke on clauses 11 and 69 in the House, but as this is my first formal contribution in Committee, I take this opportunity to reciprocate and welcome you, Sir Nicholas, to the Chair. I also thank you for your good-humoured chairmanship. You have demonstrated that light-touch regulation often works best.

Clause 41 deals with intangible fixed assets such as goodwill, customer lists, patents and certain quota payments. In 2002, the Government introduced a new regime for dealing with those, and that allowed companies to obtain corporation tax deductions for certain intangibles. The Government sought to amend the regime in 2003, to close what they believed were a number of loopholes; clause 41 is a development of that process.

The Conservatives do not object specifically to the provisions in clause 41, but we have a particular question about the treatment of single farm payments, which are due to begin in the UK around February 2006—within the current tax year. Subsection (4) is designed to prevent capital gains being rolled over into payment entitlements under the single farm payments scheme. However, there has been considerable confusion over the proposed tax treatment of those payments.

I raised that issue at Environment, Food and Rural Affairs questions on 9 June and was told by the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for South Dorset (Jim Knight), that a dedicated tax bulletin on the proposed   tax treatment of the single farm payment was due to be issued before the end of June to give farmers and their advisers time to plan. I therefore take this opportunity to inquire of the Minister whether that bulletin has yet been issued.