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Finance Bill 2021-22 - Clauses 30, 36, 41, 115 and 117 to 121, schedules 6, 7, 27 and 29 to 32
20 April 2021
Lead MP
Jesse Norman
Debate Type
Bill Debate
Tags
Taxation
Other Contributors: 35
At a Glance
Jesse Norman raised concerns about finance bill 2021-22 - clauses 30, 36, 41, 115 and 117 to 121, schedules 6, 7, 27 and 29 to 32 in the House of Commons. Other MPs contributed to the debate.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
The Government's amendments aim to tighten anti-avoidance rules, close loopholes for non-compliance, and ensure fair tax compliance. Since 2010, over £250 billion has been secured through such measures. The amendments target construction industry scheme abuses, hybrid mismatches in corporation tax, capital gains tax gift holdover relief loopholes, promoters of tax avoidance schemes (POTAS), penalties for enablers, and licensing conditional on tax registration compliance. They also propose rule changes to ensure consistency and fairness in the construction industry scheme.
Jesse Norman
Con
Hereford and South Herefordshire
Supports amendments that close loopholes, tighten anti-avoidance rules, and ensure fairness in tax compliance. Argues against Scottish National Party amendment 74 as it undermines the purpose of materials deductions within the construction industry scheme.
James Murray
Lab Co-op
Ealing North
Calls for a comprehensive approach to tackling tax avoidance and evasion. Expresses concern over the limited scope of the Bill's measures and lack of transparency regarding their impact. Highlights the need for more criminal prosecutions against promoters of tax avoidance schemes and increased HMRC staffing.
Catherine West
Lab
Hornsey and Friern Barnet
Supports her colleague's arguments, noting that there is a disproportionate focus on tackling benefit fraud compared to addressing tax avoidance by big businesses.
Andrew Mitchell
Con
Sutton Coldfield
Mr Mitchell acknowledged the need to tackle tax abuse and fraud, citing the Government's efforts since 2010. He agreed with opposition concerns about Panama and Paradise papers but emphasised that the government has made strides in tackling money laundering through beneficial ownership registers. While generally supportive of current powers over citizens, he urged the Financial Secretary to consider tougher financial penalties for professional advisers who facilitate tax evasion schemes.
Ms Hodge spoke in support of amendment 77, arguing that tax avoidance schemes are enabled by professionals such as accountants and lawyers. She highlighted cases where individuals face enormous tax demands while the enablers often escape punishment. The amendment seeks to make it easier for enforcement agencies to pursue criminal prosecutions against advisers involved in illegal schemes, aiming to deter future illegal activities.
Peter Grant
SNP
Glasgow North
Amendments proposed would improve the Bill by allowing minor works to be disregarded, maintaining existing tax schemes for the current year, and requiring the Chancellor to report back on the impact of changes. These are necessary due to ongoing challenges faced by the construction industry post-covid recession and better accountability in legislative changes.
Kevin Hollinrake
Con
Thirsk and Malton
Argues for criminal sanctions on promoters of tax avoidance schemes, citing examples like the Ingenious film scheme. Emphasises the need to simplify the tax system by abolishing business rates and increasing VAT. Also highlights that HMRC needs more resources and stronger legislation against fraud.
Ruth Cadbury
Lab
Brentford and Isleworth
Acknowledges the need to address tax avoidance but raises concerns about the complexity of measures leading to financial hardship for taxpayers who acted in good faith. Argues that retrospective taxation is causing uncertainty and stress.
Christine Jardine
Lib Dem
Edinburgh West
Supports new clause 29 for reviewing impact of tax avoidance provisions. Advocates for treating promoters of abusive schemes as acting dishonestly without proving it separately. Argues against retrospective taxation and calls for re-examination of IR35.
Burnley
Supports the Government's measures to reduce tax avoidance and evasion, highlighting HMRC figures showing a reduction in the tax gap. Emphasises the importance of maintaining public support for taxation by demonstrating clear benefits.
Catherine West
Lab
Hornsey and Friern Barnet
Calls for quicker progress on tackling tax avoidance, noting that prosecutions for tax offences are significantly lower than those for benefit fraud despite higher value. Supports the provisions but seeks assurances on safeguards against tax avoidance in freeports and corporation tax super deduction.
Ruth Cadbury
Lab
Brentford and Isleworth
New clause 29 seeks to ensure that HMRC reviews the impact of provisions in the Bill on tax avoidance, evasion, and the size of the tax gap. The amendment would also make promoters of abusive tax schemes liable for criminal prosecution without proving dishonesty separately by the prosecution. Ruth Cadbury highlights the need to address non-compliant umbrella companies which exploit workers financially through deductions and fees, often hiding these practices from users.
Kevin Hollinrake
Con
Thirsk and Malton
Emphasises that disguised remuneration schemes are highly contrived and taxpayers should be responsible for their own taxes. He defends his position against criticism from Labour MPs.
Andrew Mitchell
Con
Sutton Coldfield
Defends his hon. Friend's contribution, clarifying that Kevin Hollinrake is an estate agent and not an accountant as mentioned by Jesse Norman.
Ruth Cadbury
Lab
Brentford and Isleworth
Questions whether HMRC can reasonably expect basic rate taxpayers to do due diligence on tax avoidance schemes, especially given that they may not understand complex financial arrangements.
Erith and Thamesmead
Moves an amendment to repeal the Stamp Duty Land Tax (Temporary Relief) Act 2020 for additional dwellings, emphasising the need for equality impact analysis.
Mitcham and Morden
Proposes two new clauses: one for an equality impact review of specified sections of the bill, and another to estimate the impact of a 2% non-resident surcharge on Stamp Duty Land Tax.
Supports extending the SDLT holiday for residential property in England and Northern Ireland. Welcomes new surcharge rates for non-resident purchasers, aiming to help more people onto the housing ladder through a fairer tax treatment.
Gareth Bacon
Con
Orpington
Emphasises the importance of stabilizing and supporting the housing market during the pandemic. Highlights that extending the stamp duty holiday has led to a strong recovery in the local and national housing markets, reducing stamp duty on average transactions by 91%.
Geraint Davies
Lab
Cilfynydd
Supports amendment 81. Argues that the stamp duty holiday exacerbates inequality and does not address economic recovery. Cites examples of its impact on house prices and first-time buyers' ability to afford homes. Highlights Wales' approach as a positive example.
Felicity Buchan
Con
Westminster North
Welcomes the stamp duty holiday extension but highlights issues of foreign investors buying properties for investment and leaving them vacant. Advocates for more affordable housing, especially in London. Recommends fundamental reform to stamp duty to facilitate social mobility and ease moving costs.
Christine Jardine
Lib Dem
Edinburgh West
Supports amendment 81 due to concerns over the impact of the stamp duty holiday on first-time buyers. Advocates for increasing housing supply, proposing measures such as rent-to-buy schemes and higher targets for social homes.
Anthony Browne
Con
Westborough
Welcomes the measures in the Finance Bill, particularly the stamp duty holiday extension. Supports stimulating economic activity and recognises that both primary residences and investment properties contribute to market activity. Proposes future reforms for non-residential buyers and argues that revenue from these measures should be used to support those buying homes to live in.
Ben Everitt
Con
King's Lynn and West Norfolk
Compliments the Treasury for extending the stamp duty holiday. Argues that this measure stimulates economic activity, supports jobs and businesses, and aligns with broader goals such as net zero and levelling up. Suggests leveraging freeports and special economic zones to further support housing and investment.
Jesse Norman
Con
Hereford and South Herefordshire
Thanks all Members for their contributions. Supports the clauses as they stimulate economic activity and benefit homeowners and the housing market.
Erith and Thamesmead
Argues that the Government should not provide a tax break to buy-to-let investors and second home buyers. Proposes Labour's amendment 81 to end this unfairness, focusing on making affordable housing a reality.
Jesse Norman
Con
Hereford and South Herefordshire
Mr. Norman argued that clauses 92 to 97 provide necessary support for businesses affected by the pandemic, including VAT relief measures for hospitality and tourism sectors, digital record-keeping requirements, deferral of VAT payments, a new payment scheme for deferred VAT, and adding S4C to an existing VAT refund scheme. He also discussed clause 96, which ensures that steel imports into Northern Ireland can access UK tariffs rather than EU quotas, maintaining fairness and avoiding prohibitive duties. Mr. Norman highlighted the economic importance of these measures in supporting over 150,000 businesses and more than 2.4 million employees.
Pat McFadden
Lab
Wolverhampton South East
Supports clauses 92-97 for their positive impact on struggling sectors and businesses. Proposes new clause 30 to ensure a comprehensive review of the tax implications of transitioning from LIBOR, especially concerning supply chain finance issues highlighted recently.
Andrew Jones
Con
Harrogate and Knaresborough
Argues for the extension of VAT reduction to support employment in tourism and hospitality sectors, which are among the hardest hit by the pandemic. Emphasises the importance of stability for businesses to rebuild reserves and generate cash flow, highlighting significant impacts on local economies like Harrogate and Knaresborough.
Peter Grant
SNP
Gordon
Supports the extension but calls for a longer period of reduced VAT beyond September 2021, arguing that it is unrealistic to expect immediate recovery. Proposes new clause 16 requiring Chancellor's report on impacts and amendment 64 preventing Treasury from bringing forward the March 2022 deadline for full rate unless sector recovers faster than expected.
Sarah Olney
Lib Dem
Richmond Park
The Liberal Democrats argue for extending the cut to the VAT rate on hospitality and tourism sales for the whole financial year instead of moving it back to 12.5% from September onwards. She raises concerns about businesses being faced with large VAT bills despite limited opportunities to earn revenue in the last year. Proposes a revenue compensation scheme to help businesses with fixed costs such as rent.
Jamie Stone
Lib Dem
Caithness, Sutherland and Easter Ross
Supports the extension of the VAT reduction beyond September 2021. Emphasises that businesses in his constituency are fragile due to the short tourist season and the dependency on revenue generated during this period. Advocates for training elements within support packages and highlights issues with bank coverage in remote areas.
Jesse Norman
Con
Hereford and South Herefordshire
The MP thanked colleagues for their contributions and addressed concerns raised by other MPs. He argued that the Scottish Government has the power to use tax revenue as they see fit, suggesting they do not need constant support from the UK Government on matters of taxation. Norman highlighted the success of Making Tax Digital for VAT, stating it provides businesses with better management tools and IT productivity gains, which should be extended. He also discussed the effectiveness of self-employment income support schemes and expressed optimism about economic recovery despite current challenges.
Linden interjected to point out that while the Minister argues the Scottish Government has not used their tax powers effectively, they are often cited as having one of the highest tax burdens in the UK. This intervention highlights a contradiction in the argument presented by Jesse Norman.
Jamie Stone
Lib Dem
Caithness, Sutherland and Easter Ross
Stone interjected to seek further meetings for business representatives who had previously discussed issues in the hospitality trade with the Chancellor of the Duchy of Lancaster. He requested that a representative from the Treasury be willing to meet these representatives again if they travel to London, suggesting ongoing dialogue and support is needed.
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