Clause 29

Part of Finance (No. 2) Bill – in a Public Bill Committee at 9:15 am on 28 October 2010.

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Photo of Justine Greening Justine Greening The Economic Secretary to the Treasury 9:15, 28 October 2010

Thank you, Mr Caton. It is a pleasure to serve under your chairmanship on this final day of the third Finance Bill of the year.

Clause 29 introduces schedule 13, which amends provisions covering excise compliance checks. HMRC has been reviewing powers and safeguards for checking compliance. Previous Finance Acts introduced a modernised and aligned checking framework, which now applies across HMRC’s other taxes and duties. Schedule 13 completes that work.

Excise is a specialised type of regime. The key risks are in the goods themselves, and therefore access to those goods is crucial. Excise fraud in alcohol, tobacco and oil is a major risk to the Exchequer, to legitimate businesses and to consumers. For that reason, the Government have taken a different approach to the powers and amended them rather than align excise within the framework that applies to other taxes.

As the right hon. Gentleman said, the proposals have been subject to two full formal consultations since July 2009, and draft legislation was published in January and again this summer. The responses received were broadly positive across all excise trade sectors, including those from the Association of Chartered Certified Accountants, the Chartered Institute of Taxation—I will come shortly to the points that it raised—the Institute of Indirect Taxation, the National Casino Industry Forum, the Scotch Whisky Association and the Tobacco Manufacturers Association. They all recognise the need in future to tackle the illicit market more strongly than we have been able to in the past.

The changes complete the work so far done on modernising compliance checks. They provide useful new powers that will ensure that HMRC can continue to be effective in tackling the fraud that pervades the excise arena. On the additional powers and the published guidance, I can assure the right hon. Gentleman that, as this measure introduces amendments to existing legislation, the current guidance will be updated to take account of the changes.

As was promised in the response document issued in March 2010, HMRC will be exposing the guidance for comment, which is in line with the approach to previous changes to compliance-checking powers. We will ensure that the guidance is updated, which will avoid the risk that the powers being changed by the clause might be misapplied.