Clauses 41 to 46—I will speak on clause 41—have to do with specific measures on capital allowances and relate mostly to anti-avoidance measures. We support the attempts to close loopholes in tax legislation and to crack down on tax avoidance. On a wider level, the Government this week released consultation on the general anti-avoidance rule, which we will scrutinise, because we all have a responsibility to ensure that companies and individuals pay their fair share of tax. We support the measure, but we have some specific questions about the clauses in this part of the Bill.
In a previous sitting, my hon. Friend the Member for Pontypridd (Owen Smith) talked about the effect of the Government’s choices with regard to capital allowances on a plastics manufacturer in Ebbw Vale. Last year, the Government decided to cut corporation tax, paid for by a £2.6 million cut in capital allowances. When considering these measures, it is important to remember that context, and it is vital that the Government show some consistency on the issue, and any issues relating to capital allowances. We know that changes to capital allowances have the largest impact on firms with capital-intensive operations. Although these measures are aimed at tax avoidance, it is important to bear in mind who will be dealing with the new rules in the course of the business.
Clause 41 is designed to tackle a specific avoidance scheme in relation to plant and machinery. What steps will be taken by HMRC to ensure that the measures work as planned to close the loophole, and to ensure that manufacturers and suppliers cannot use these measures to facilitate avoidance?