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Clause 30 - Avoidance schemes involving the transfer of corporate profits

Finance (No. 2) Bill – in a Public Bill Committee at 4:15 pm on 6th May 2014.

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Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Treasury) 4:15 pm, 6th May 2014

I beg to move amendment 11, in clause 30, page 30, line 8, at end insert—

‘(3) The Chancellor of the Exchequer shall, within six months of the passing of this Act, publish and lay before the House a report setting out the impact, over the next three years, of the changes made to the Corporation Tax Act 2009 by this section.

(4) The report must in particular set out—

(a) how much additional tax revenue the measures introduced by this section are expected to generate to the UK Exchequer, for each year in which they are in operation; and

(b) the impact of those measures on revenues lost to the Exchequer as a consequence of tax avoidance schemes, for each year in which they are in operation.’.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

With this it will be convenient to discuss clause stand part.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Treasury)

Clause 30 relates to avoidance schemes that involve the transfer of corporate profits. It proposes to insert new section 1305A after section 1305 in chapter 1, part 20 of the Corporation Tax Act 2009, whose intention is to stop arrangements that are entered into to transfer profits between companies in the same group for tax avoidance reasons.

The way in which we have come to this point, with clause 30 and the proposed insertion of new section 1305A into the CTA 2009, is illuminating and raises a number of questions. The measure follows the announcement of proposed new section 695A of the CTA 2009 on 5 December 2013, which was to be introduced in the Finance Bill 2014 with effect from the date of the announcement, that being the date of the autumn statement.

That measure was intended to close down a type of avoidance scheme in which a company enters into a derivative contract, known as a total return swap, with a parent company, or another group company generally located in a tax haven. Under the contract, all the company’s profits are paid away in return for much  smaller payments back. A deduction is then claimed for the payment under the contract, leaving little or no profit chargeable to tax.

So far, so straightforward, except that, at some point between the announcement of section 695A and its revision, which occurred in January 2014, it seems that the HMRC became aware that avoidance schemes were being marketed to circumvent the provisions of section 695A by using arrangements other than derivatives to achieve the same effect, which is to try to obtain a deduction for a payment designed in substance to move profits earned in the UK to a tax haven, or otherwise to divert profits to generate a tax advantage. Therefore, we have clause 30 before us today and the addition of section 1305A into the CTA 2009.

Three things flow from that sequence of events. First—I will put this as a question—exactly what happened? What kind of scheme did HMRC become aware of that was designed to circumvent section 695A so soon after its announcement in the autumn statement at the end of last year? It would be helpful if the Minister detailed the sequence of events, as it would be good for the Committee to understand exactly what happens at the coal face when it comes to avoidance activity.

I understand that section 695A was itself revised, as I mentioned, in January 2014. A quite helpful technical note accompanied the revision in January. Will the Minister clarify exactly where we are up to with regard to section 695A, its revision and its interaction with proposed new section 1305A?

I note that the Exchequer Secretary is not here today. He and I have had a lot of discussions about avoidance activity and how quickly it can take place. He might not have been stunned, but certainly I was stunned at the speed of such avoidance activity, perhaps because I have been in this role for only a few months. Those who want to engage in such avoidance activity seem to move very fast, and it is good that HMRC has been able to head that off by tabling proposed new section 1305A and that it is proactive in doing so.

There are, however, questions about the simplicity of the tax code. Initially, we had a measure designed to clamp down on an avoidance activity. Almost immediately after, we had to table another measure. Many of the lawyers I have spoken to in relation to clause 30 have raised concerns about additional complexity in the tax code. Will the Minister give us the Government’s view on what that means for simplicity in the tax code, given that further technical guidance is expected on section 1305A? The Exchequer Secretary and his officials are consulting various tax practitioners and legal advisers who will be engaged in that work. When the Minister answers that question, will she also explain to the Committee whether the Government view this and another measure as sitting with the work of the Office of Tax Simplification as well?

Another question I have is on the foreseeability of the need for section 1305A, given the speed with which the Government had to introduce it. I assume that, when section 695A was introduced in the autumn statement, there must have been some investigation at HMRC into the behaviour that was causing concern and the Government felt moved to tackle. Should it have been clearer or more obvious to HMRC that companies  would move from a total return swap arrangement to a commodities trading-type arrangement, which would not be caught by section 695A, but which will be caught by section 1305A? Will the Minister explain whether it was the fear around commodities trading arrangements, as opposed to total return swap arrangements, that prompted the HMRC action that led to the clause?

The Exchequer impacts are illuminating. The impact for section 695A, as set out in the documents alongside the autumn statement, gave a net gain to the Exchequer of £40 million for 2013-14. That gain remains at £40 million for 2014-15, goes down to £20 million for 2015-16 and to £10 million for 2016-17. The impact of proposed new section 1305A is much greater. For 2014-15, the Exchequer impact forecasts a net gain to the Exchequer of £60 million. That rises to £80 million in 2015-16, remains at £80 million in 2016-17, rises to £85 million in 2017-18 and decreases slightly to £75 million in 2018-19. That differential in the Exchequer impacts goes to the heart of our amendment, which seeks a review of the Exchequer impact of the measures in clause 30.

Given that the projected Exchequer impacts of each section are so different and given how quickly section 695A unravelled and section 1305A was required, it raises the question of how effective the sections will be at clamping down on tax avoidance that results from the profit shifting that the Government rightly want to tackle. What evidence resulted in the significant difference between the two Exchequer impacts? What was the reason for the underestimation? It would be helpful if the Committee understood that.

On the detail of the clause, the technical note for proposed new section 1305A was helpful, particularly at paragraphs 8 and 9. I will not repeat exactly what they say, but the Minister will note that their wording is fairly broad and much broader than the wording that we have seen for tax avoidance measures more generally. The former lawyer in me sees a number of immediate challenges to the scope of the proposed new section. A number of the technical specialists who have looked at the technical note and how the section might be implemented have also raised concerns about the wording. As I said earlier, I hope that we will get some guidance from HMRC about how the section will be implemented and interpreted. I hope that the Minister can provide some more detail on that. At the moment, discussions are continuing with tax specialists and HMRC, but the process is not immediately clear. I should be grateful if the Minister explained when we will get that guidance and whether it will cover interpretation, given how broad the wording is at the moment.

We support measures to clamp down on profit shifting. It is a difficult area to deal with and there has been a lot of action on the international front in this regard, particularly from the OECD, which was called on by G20 Finance Ministers in 2012 to consider how to deal with the problem of base erosion and profit shifting. In February 2013, the OECD presented its report to the G20 Finance Ministers and an action plan to deal with amendments and changes to international tax rules was requested, to combat base erosion and profit shifting. That plan was endorsed in 2013.

Perhaps the Minister could help us understand how the Government regard the clause’s sitting alongside that OECD BEPS process, because the OECD will consider some relevant issues in its action plan. I believe  that the timeline for the relevant action points that touch on issues raised in the clause is September 2014, which is when the OECD expects to give its report.

Obviously, the Government have moved a bit further and more quickly than the OECD BEPS process. Does the Minister expect further changes to this measure and attempts to combat profit shifting, beyond what we see already in the clause? How confident is she that the clause will be compliant with what will come out of the OECD BEPS process and that additional amendments will not be needed?

There is also an issue in relation to the GAAR—the general anti-abuse rule that came into force on 17 July 2013, which is part of a Government approach to managing the risk of tax avoidance. Looking at the detail of the clause, I was struck by the possibility that the GAAR could have been used instead of the clause. I am not clear why the Government did not feel able to rely on the provisions in the GAAR, rather than introducing the clause. It would help if the Minister explained the Government’s thinking about why profit shifting and the tax avoidance as a result thereof, as dealt with in the clause, could not have come within the scope of the GAAR. Given that we have not even had a court case yet in relation to the GAAR, that would help us to understand the Government’s thinking about how that will be implemented in a more practical way.

There remains an issue in relation to resources at HMRC. I should be grateful if the Minister explained where the experts who deal with this type of tax-avoiding behaviour sit within the wider HMRC framework. I assume that they might be connected to the large business service, but they might sit in a different team. It would help to know how many people are allocated to looking at this type of work, so that we can understand how busy they might be when the clause comes into effect.

In the technical note, HMRC concludes that a number of different financing structures may or may not fall under the clause, excepting cases where there is a tax-avoidance purpose. I am sure that when the lawyers get hold of the measure when the Bill becomes the Finance Act 2014, they will have a lot of fun with it. I should be interested to know how, at this point, HMRC intends to define that tax-avoidance purpose.

Finally, I have a couple of questions that have helpfully come from various taxation specialists connected to the Chartered Institute of Taxation. They raise an important point in relation to charities and the fact that the legislation seems to catch the normal transfer of profits into genuine charities from their trading subsidiaries. Can the Minister confirm whether those long-accepted transactions will be exempted from the clause?

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover 4:30 pm, 6th May 2014

I am listening to the hon. Lady’s argument with interest. Does she not think it is really important that the Government are strong on tax avoidance, particularly regarding moving profits into tax havens?

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Treasury)

Absolutely. We have supported the OECD’s BEPS project and all measures to tackle profit shifting. Such behaviour is damaging not just for our tax base and how much corporation tax is raised in this country, as it also affects businesses that do not engage in that activity. That explains why we do not  oppose the substance of clause 30; our amendment is designed to get to the heart of the difference in the impact for the Exchequer of proposed new sections 695A and 1305A. However, the principles behind clause 30, and the desire to challenge profit shifting that is designed to avoid paying the correct or fair share of tax—however that is defined—are correct.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

For the benefit of anyone reading the report of this sitting, does the hon. Lady agree that whether one uses differential prices to buy coffee beans or does the same thing through clever financial engineering, it is still wrong? People should not engage in the practice and should not game our tax system, as has been the case too often in the past.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Treasury)

The hon. Gentleman highlights a number of different ways in which profit shifting occurs. One type is transfer pricing, while another way of shifting profits is what we have been discussing in relation to the clause. Governments should tackle such artificial profit shifting between companies in the same group, or in other ways in relation to transfer pricing, and the OECD process, which we support, is very much centred on that. We want a much better international taxation regime that takes account of all these issues.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Treasury)

I shall finish my remarks.

The guidance on proposed new section 1305A will clearly be important to help practitioners to understand how the measure will operate in practice. I understand that, during the discussions that have already been held with some practitioners, indications have been given about what the measure will and will not capture. It would be helpful if the Committee could be privy to those indications, as that would certainly help our deliberations.

Photo of Chris Williamson Chris Williamson Labour, Derby North

I rise to make a brief contribution in support of my hon. Friend. It is important that we place on record the general public’s cynicism that the Government are in any way interested in clamping down on tax avoidance. Before the election, the Prime Minister said that he would not balance the books on the backs of the poor, yet that is precisely what the Government have been doing over the past four years. People feel very strongly that a different set of rules operate in this place. The Government are hitting ordinary people with VAT increases and the bedroom tax, and are bringing more and more people into the 40p tax rate, but when it comes to doing anything about tax avoidance, they are singularly failing.

It is not just me saying that, and it is not the view—cynical, perhaps—of just the general public or the mass media. HMRC itself has acknowledged that tax avoidance has gone up by £1 billion, so there is quite clearly a desperate need for more action to address this, because people are understandably cynical when they see stories such as that reported on “Panorama” a couple of weeks ago about Bernie Ecclestone, with a £1 billion tax liability, being able to agree a £10 million pay off. It seems that the Government are singularly failing to take meaningful action to deal with tax avoidance.

That is all I want to put on record—[Hon. Members: “Hear, hear!”] I am pleased that Government Members are cheering, but it is important that amendment 11 is agreed to because people have a right to know. It is all very well for the Government to say that they want to clamp down on tax avoidance. It seems to me that they have a record of saying that they would like to do something about these abuses, but in reality they do not deliver very much. Amendment 11 is very clear. If it is agreed, we will know the Government’s impact precisely, and surely that is in all our interests. Surely our job is to ensure that we represent the wider public and that people have confidence that the Government and parliamentarians are serious about dealing with this dreadful abuse. The books are continually being balanced on the backs of people on low and middle incomes. The public need to know that sacrifices are not being made exclusively by ordinary people and that everybody, including the corporate sector, is paying their way. I therefore hope that the amendment will be agreed to.

I will be interested to hear precisely what the Minister proposes to do regarding international efforts to deal with tax avoidance, because this problem afflicts not just the United Kingdom—it is much broader. International, intergovernmental action is required, so will she say precisely what the Government are doing in that regard?

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

I have been provoked by the hon. Member for Derby North briefly to set the record straight. This country has had a scourge of tax avoidance for too long. As Members on both sides of the House know, I have long campaigned for positive reform. However, in response to the hon. Gentleman’s speech—it was a shame that it missed the opportunity to build consensus in this Committee—I note that, in the Labour years, corporation tax receipts rose by about 6% in real terms, whereas income tax receipts nearly doubled. That was a great shame, and those figures show that the system was too lax. The steps that this Government have taken to tackle the problem of transfer pricing and profit shifting are to be welcomed. The Chancellor’s move to engage with the OECD to start international discussions about how we can change the international rules to deal with an international problem is especially welcome.

Photo of Chris Williamson Chris Williamson Labour, Derby North

The international approach is important but, in the interests of reaching a consensus, will the hon. Gentleman support the amendment?

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

I thank the hon. Gentleman for his helpful intervention, but I will not, because I want action, not words. We have had too many words, especially from the hon. Gentleman, and I welcome the fact that we have action from this Government.

Finally, I note that the Government have reduced the amount of income tax paid by hard-working people and their families, increased the personal allowance and helped people into work, having creating more jobs than for a very long time. The Government’s efforts, especially for the least well-off, are worthy of high praise as we go further into recovery.

Photo of Ian Mearns Ian Mearns Labour, Gateshead

Will the Minister let us know, in the light of HMRC’s estimates, how many companies are established with the sole purpose of being a subsidiary to a greater corporate entity to take advantage of tax avoidance schemes that relate to the clause? Does HMRC have a good estimate of how many subsidiary companies are established solely for that purpose?

Photo of Andrea Leadsom Andrea Leadsom The Economic Secretary to the Treasury

To respond to the hon. Member for Derby North, I completely agree with my hon. Friend the Member for Dover that it is a shame to take an approach of throwing around accusations about progress on tax avoidance, because the past two years have seen a step change in the Department’s approach to tackling avoidance, following the introduction of a number of new tools, including the GAAR. Over 13 years, the hon. Gentleman’s Government failed to introduce such a measure. That is a new regime for high-risk promoters of avoidance schemes and for accelerated payments of disputed tax in avoidance cases. HMRC is relentless in tackling tax avoidance and there are strong signs that its approach is working. HMRC has successfully challenged avoidance across all sectors, including corporate avoidance, personal tax avoidance, and the avoidance of direct and indirect taxes.

The number of disclosed tax avoidance schemes has fallen dramatically. It almost halved between 2011-12 and 2012-13, and it continues to fall. We win around 80% of the avoidance cases that we litigate. Our wins in court have protected billions of pounds in tax. That success means that there is less tax avoidance than there was several years ago, especially in the large business sector, and reputable advisers are turning away from tax avoidance for personal tax clients.

Photo of Chris Williamson Chris Williamson Labour, Derby North

Perhaps the Minister will explain why there appears to be a discrepancy between what she is saying—that avoidance is going down—and the HMRC figures that suggest that there has been an increase in corporate tax avoidance. How does she square those two statements?

Photo of Andrea Leadsom Andrea Leadsom The Economic Secretary to the Treasury

As I understand it, it is because the hon. Gentleman is looking at the percentage of tax avoidance. I think it is because the overall tax receipts have increased. I apologise that I am not quite sure of the numbers to which he refers, but I can talk to him about that later.

Photo of Ian Swales Ian Swales Liberal Democrat, Redcar

I congratulate the Minister on her appointment. Does she join me in welcoming the CBI’s latest document on tax, which acknowledges that the climate for tax avoidance has changed and specifically mentions that the Public Accounts Committee and other parliamentarians are doing a good job in this area?

Photo of Andrea Leadsom Andrea Leadsom The Economic Secretary to the Treasury

All the evidence suggests that the Government are successfully changing the culture and experience of tax avoidance in Britain. I commend the work of the Public Accounts Committee, which has done a great job.

Clause 30 blocks avoidance schemes that involve the transfer of profits between companies in the same group to avoid corporation tax. It has similar effects to the previous clause, on disguised distribution arrangements  involving derivative contracts, but while that measure applies only when the profit transfer is made using a derivative contract, this clause applies however the profit transfer is achieved. Amendment 11 would provide for the publication of a report on the tax impact of the measure, and I shall speak about that shortly.

Let me explain what type of scheme the clause is designed to counter. The schemes may involve arrangements whereby a payment of profits is made from a UK company to another group company, generally in a tax haven, and a deduction is claimed for that payment, meaning that no profits are left to be charged to tax. Alternatively, it may involve the diversion of profits before they even reach the UK company. The transaction is designed to confer a tax advantage that was never intended. We do not accept that the schemes succeed in reducing corporation tax and they are liable to challenge. However, the measure is being introduced now to give certainty to taxpayers and to put a stop to these schemes quickly.

Photo of Ian Swales Ian Swales Liberal Democrat, Redcar

May I press the Minister a little on what she is saying? Will the changes that she is describing include schemes in which interest is transferred to a group company—for example, when the group buys shares in a tax haven and loans money back to the UK group such that profits are transferred through interest payments? That is one of the most common methods used to achieve what she is seeking to stop.

Photo of Andrea Leadsom Andrea Leadsom The Economic Secretary to the Treasury 4:45 pm, 6th May 2014

The Government have published a guidance note explaining precisely the purpose of the legislation, in which I believe my hon. Friend’s point is addressed. I would, however, have to confirm that specific point.

The changes made by clause 30 will ensure that when profits are transferred from one company in a group to another for tax avoidance reasons, such profits will be taxed as though the transfer had not been made. Clause 29 targets arrangements involving financial derivatives; clause 30 goes wider and targets schemes using any possible mechanism when transactions are entered into to avoid tax. That will be achieved by adding back in diverted profits and any deduction claimed for a transfer of profits.

Concerns have been expressed that normal commercial arrangements could be affected by the measure, especially those relating to reinsurance, so the Government have published a guidance note explaining the purpose of the legislation. I should emphasise that the measure will affect only arrangements with a tax avoidance motive.

The information that amendment 11 would require was published in the tax information and impact note that was published on 19 March. The figures show that the measure is expected to raise £360 million over the next five years. Those figures were subject to scrutiny by the Office for Budget Responsibility, and I confirm that they were certified by the OBR following the rigorous procedures that the Government have put in place. The report proposed in amendment 11 is therefore unnecessary.

I will try to answer the many questions of the hon. Member for Birmingham, Ladywood, which I thought were some kind of IQ test, especially when she asked  where the HMRC officials are located. I wondered whether she was testing my knowledge of Treasury seating arrangements—

Photo of Andrea Leadsom Andrea Leadsom The Economic Secretary to the Treasury

Exactly. I shall endeavour to tell the hon. Member for Birmingham, Ladywood where the coffee shop is as well.

My hon. Friend the Member for Redcar asked whether all schemes will be included under clause 30. I assure him that if avoidance of any sort is involved, it will fall within the scope of the clause.

The hon. Member for Birmingham, Ladywood asked why it was necessary to introduce the measure. Clause 29 is aimed at an avoidance scheme that uses derivatives. It was spreading steadily, so the Government took action took action to close it down at the autumn statement. HMRC then found out that other schemes were being marketed that, it was claimed, could avoid the effects of that clause. They were being marketed in a blatant way, so we are now taking action to close down such new schemes with a broader and more comprehensive measure to prevent any further loss of tax.

The hon. Lady then asked why the measure was introduced just after the derivatives measure and if that meant that we got this wrong. Not at all. The derivatives scheme appeared first, so we took action to close it down as quickly as possible. That demonstrates how determined the Government are to take decisive action to protect public revenue.

The hon. Lady asked how many companies are using such schemes and how much tax is at risk. We are taking action to stay ahead of tax avoiders. We do not know of any individual company using such a scheme, but HMRC is aware that schemes are being developed to try to get around the effects of our measures effective from the autumn statement. The scheme on which we took action was being used by at least five companies, involving a tax loss of about £40 million in 2012-13 and £120 million in the first full year. The measure before us will protect that tax from further risk of loss and also against other schemes involving the transfer of profits.

The hon. Lady asked whether the situation is now too complicated. As she knows, a review of loan relationships and derivatives legislation is in progress, and that is subject to a big consultation. We have the opportunity to simplify tax, not complicate it. The general anti-abuse rule will close down a wide range of schemes that might arise in future.

The hon. Lady asked whether the figures on tax were too high or perhaps not reliable. I mentioned earlier that the revenue estimates are subject to the scrutiny of the Office for Budget Responsibility, and I can confirm that the figures were certified by the OBR following the rigorous procedures that the Government put in place. She suggests that the measure’s effects are broad, but, on the contrary, it has only a narrow effect—it is aimed at specific schemes that involve the transfer of profits. That is made clear in guidance and in the wording of the measure itself. It applies only to the transfer of profits, not to the payment of expenses, and the tax avoidance-purpose test means that normal business arrangements will not be caught.

I was asked where HMRC sits. I know that it sits on the second floor of the Treasury building but, specifically, it can sit in the large business team or in specialist positions. Various specialists are reporting on this work. There has been a good, co-ordinated effort by the hard-working teams in HMRC. That shows their dedication to the cause of protecting Exchequer revenues, for which we should be extremely grateful.

The hon. Lady asked whether the Government were acting unilaterally regarding BEPS and why we should not wait for the outcome of that action plan. As she would expect, the Government want to take swift and decisive action to clamp down on avoidance when it is identified. It was important to act quickly, as I have indicated, because of the numbers of pounds that we were losing due to such schemes. It was important to act quickly to prevent the schemes from spreading, which would have led to the loss of significant amounts of tax. Acting now to address this particular problem shows that the Government are taking domestic action while we are supporting longer-term international work to prevent arrangements that inappropriately shift profits to low-tax jurisdictions. Fundamental reform to the international tax rules necessarily requires multilateral action, which is why the Government have fully committed to working with our international partners through the G20-OECD BEPS project. She should be pleased, as I think we all are, that the Government are taking a leading role in that multinational work.

The hon. Lady asked why this clause is needed now that we have the general anti-abuse rule and if it means that the GAAR will not work. In fact, the GAAR will address a range of offensive schemes, but HMRC has made it clear, as have I, a number of times, that we will when possible challenge all types of avoidance. We will continue to introduce targeted measures aimed at particular schemes, some of which might not otherwise meet the high threshold required for the GAAR to apply.

The hon. Lady asked whether the clause might affect charities, but I assure her that the legislation will not apply if a company pays its profits for charitable purposes unless avoidance is present. It is not avoidance if taxpayers use statutory relief for charities in the way intended by Parliament.

Photo of Chris Williamson Chris Williamson Labour, Derby North

I am interested in the Minister’s point about international efforts. Is she able to give us more information about when it is expected that an international agreement will be in place to ensure that there is no hiding place for companies that try to minimise their tax liability—especially that to the UK, but also that to other countries in which they make their profits?

Photo of Andrea Leadsom Andrea Leadsom The Economic Secretary to the Treasury

I cannot give the hon. Gentleman a specific date but, as he knows, that is a top priority for the Government. We are leading the discussion on multilateral tax avoidance obliteration, and he should be glad, as we all should be, that we are playing such a lead role. He will appreciate that it takes time to get multilateral agreement, but we are working as hard as we can to achieve it.

The clause will prevent avoidance through transfers of profits between companies, and it supports the Government’s objective of fairness and certainty in the  tax code. I therefore ask the hon. Member for Birmingham, Ladywood to withdraw amendment 11 and hope that the Committee will support clause 30.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Treasury)

I must apologise to the Minister for the number of questions that I put to her, but I feel that is my job to do so, given that the point of this Committee is to carry out line-by-line scrutiny of a very large Bill. I am not interested in the HMRC coffee shops, but I am interested that, as she noted, some of the HMRC specialists and officials who will engage with clause 30 sit within the large business service. I shall continue to put questions to the Exchequer Secretary about the constant delays that I hear about in relation to the large business service. The Minister may have missed that that was the thrust of my question, given that she does not cover the service on a day-to-day basis.

I am afraid to say that I did not hear from the Minister a compelling reason for the difference in the Exchequer impact between proposed new sections 695A and 1305A. Given her failure to address that point, I am minded to press amendment 11 to a Division.

Question put, That the amendment be made.

The Committee divided: Ayes 13, Noes 17.

Division number 4 Decision Time — Clause 30 - Avoidance schemes involving the transfer of corporate profits

Aye: 13 MPs

No: 17 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Clause 30 ordered to stand part of the Bill.