Accounting periods and meaning of “a group’s accounts”

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

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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 61 to 63 stand part.

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

These clauses, which are again of a thoroughly technical nature, provide more details on some of the aspects we have been discussing already in relation to the digital services tax.

Clause 60 sets the time period over which a group will account for revenues from relevant business activities for DST. This will usually be the period of account of the parent company of the group, which reduces the administrative burden as far as possible for these groups. They will be able to use figures they collect for other purposes wherever possible.

Clause 61 sets out how revenues and expenditure will be apportioned when a group’s period of account does not coincide with an accounting period. For example, many groups make up their accounts to 31 December each year. For 2020, their accounts will be for the 12 months to 31 December. However, for DST, their accounting period will only be nine months, from 1 April 2020 to 31 December. There is a mismatch in periods, and this clause enables the accounting figures to be used for DST by taking the correct proportion of those accounting figures.

Clause 62 sets out what is meant by

“revenues arising, or expenses recognised, in a period” for the purposes of the DST legislation. Both of those terms mean the figures recognised in accordance with the applicable accounting standards for that period. Again, this demonstrates that the Government are seeking to minimise the burden of administration as much as possible by using figures that already exist for other purposes. Finally for this group, clause 63 sets out the definition of various terms relating to accounting standards for the purposes of the legislation. I commend these clauses to the Committee.

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

Once again, these clauses are technical in nature, and we have no further comments for the Minister in this area.

Question put and agreed to.

Clause 60 accordingly ordered to stand part of the Bill.

Clauses 61 to 63 ordered to stand part of the Bill.