Meaning of “group”, “parent” etc

Finance Bill – in a Public Bill Committee at 2:15 pm on 11th June 2020.

Alert me about debates like this

Question proposed, That the clause stand part of the Bill.

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden

With this it will be convenient to discuss clauses 57 to 59 stand part.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

This group of clauses is again of a rather technical character and deals with some of the more detailed technical requirements of the new tax.

Clause 56 sets out the definitions of the terms “group” and “parent”, which are used to define the companies and revenues that will be taxable for the purposes of the digital services tax. It should be read along with clause 57, which makes it clear that the definition of “group” will be the same as that used for accountancy purposes. The choice of using accountancy definitions to define the group is, again, to reduce the burden of this new tax and to make it as straightforward and comprehensible as possible. Wherever possible, the Government are seeking to minimise the burden of administering the tax by using concepts that already exist and are in common use, if for other purposes.

Clause 58 sets out the conditions that determine if a group has remained the same in different time periods. That will be relevant when members of a group change through acquisition, disposal or otherwise over time. Like the changes to the responsible member, these everyday business transactions of companies joining and leaving groups should not prevent the tax operating correctly and this clause ensures that these changes do not prevent the tax from applying.

Finally, clause 59 sets out the treatment of two or more entities that are treated as stapled to each other and are subsidiaries of a “deemed parent”. This is a technical measure designed to enable the tax to work as intended in the widest possible circumstances. I therefore commend these clauses to the Committee.

Photo of Bridget Phillipson Bridget Phillipson Shadow Chief Secretary to the Treasury

These clauses are technical in nature and we have no questions to ask of the Minister.

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden

I cannot imagine that the Minister wants to sum up.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

No, I am entirely content with the summary that has been given by the hon. Lady.

Question put and agreed to.

Clause 56 accordingly ordered to stand part of the Bill.

Clauses 57 to 59 ordered to stand part of the Bill.