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Clause 60

Part of Finance Bill – in a Public Bill Committee at 12:30 pm on 16th June 2009.

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Photo of Stephen Timms Stephen Timms Financial Secretary (HM Treasury) (also in the Department for Business, Innovation and Skills) 12:30 pm, 16th June 2009

Again, I welcome the support of both Opposition spokesmen for the clause. It contains further clarification of the double taxation relief rules to prevent the abuse of those rules by banks through tax avoidance schemes. This is the last of the four clauses that deal with double taxation relief. The double taxation relief rules are designed to give relief in the UK for foreign tax paid on foreign profits and to ensure that UK tax paid on profits earned in the UK is not reduced by foreign tax. Some companies, banks in particular, devised sophisticated schemes to abuse those rules by using foreign tax to reduce the UK tax payable on profits.

The hon. Member for Southport has drawn attention to the general public view of behaviour of that kind. There has been some press coverage of it in recent months, which the banks are sensitive to. I am not able to name names in this debate, as he knows, but the Chancellor has announced that we will publish for consultation a code of conduct for banks in this area in the hope of changing some of the practices that have grown up over the years.