Schedule 37

Part of Finance Bill – in a Public Bill Committee at 7:00 pm on 10 June 2008.

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Photo of David Gauke David Gauke Shadow Minister (Treasury) 7:00, 10 June 2008

Thank you, Sir Nicholas, for your guidance. I shall try to present my comments on the four amendments in as brisk and workmanlike a manner as possible.

Schedule 37 is about record-keeping requirements. Amendment No. 294 relates to the provisions contained in paragraph 2(4), which allow commissioners for HMRC to make regulations specifying additional records and supporting documents that are to be kept and preserved. The concern that we have—this will run through my comments on the other amendments—is whether Parliament is surrendering too much power in the circumstances.

The concern in respect of paragraph 2(4) is that if powers are given to make regulations to impose enhanced record-keeping requirements, those powers should be limited. I believe that the intention behind the powers is to have enhanced record-keeping requirements relating to missing trader intra-Community fraud, which is an important issue. We do not for a moment want to impede the Government’s desire to tackle MTIC fraud. However, if that is the concern, the provisions should be limited to that area. Hence, amendment No. 294, which was proposed by the Institute of Chartered Accountants, would make the additional requirements that may be produced through regulation more specific. In essence, it would limit them to VAT matters.

Amendment No. 191 was tabled by the Liberal Democrats, and I have no doubt that the hon. Member for Taunton will speak on it. We are sympathetic to it because it would address the power that schedule 37 gives HMRC to

“make provision by reference to things specified in a notice published by...Her Majesty’s Revenue and Customs in accordance with the regulations”.

We are discussing regulations that will not be made by Parliament, whether through affirmative or negative resolution, but, as far as one can see, simply through guidance produced by HMRC. There will be no opportunity for Parliament to scrutinise them in those circumstances.

There is also a practical concern for taxpayers who are seeking to comply with their record-keeping requirements. Where those requirements are changed simply in relation to HMRC guidance, it will be increasingly difficult for taxpayers and professional advisers to monitor what those changes might be, so this is not purely about parliamentary accountability. The Minister may be able to address those concerns.

A practical point must be borne in mind. Amendments Nos. 275 and 276 relate to further powers under schedule 37 and both would require a resolution to be made under the affirmative procedure. During this debate, we have not taken a dogmatic approach on whether affirmative or negative resolution should be in place, but we would like to test the Government’s position on those matters. We look forward to hearing what the Minister says.