Key Facts

• The clause seeks to address a tax gap of £5.8 billion.
• The requirement applies only to corporation tax, VAT, income tax and PAYE returns.
• The policy targets companies with turnover over £200 million or balance sheet total exceeding £2 billion.
• Businesses must notify HMRC if there is a tax difference involving more than £5 million.
• Legal interpretation tax losses result in irrecoverable Exchequer losses due to disputes not identified early enough.
• Clause 94 will affect approximately 2,300 large businesses.
• Businesses must notify HMRC if they have taken an uncertain tax position and meet certain conditions, estimated costs up to £3 million per year for the business sector.
• The regime aims to be clear and well-targeted without including a third trigger (substantial possibility test) initially.
• Large businesses are defined as those with a turnover above £200 million or a balance sheet total of over £2 billion.
• The tax gap attributable to differences in legal interpretation was £5.8 billion in the financial year 2019-20, with £3.2 billion attributed to large businesses.
• HMRC estimates a cost of £1,300 for each business impacted by the measure.
• MP Christopher Chope addresses clauses 95 and 96 of the Finance (No. 2) Bill.
• No specific action other than discussion of these clauses is requested.
• Clauses 95, 96, and 97 address tax administration provisions.
• Clause 95 ensures discovery assessments can be used to recover the child benefit charge and similar charges when taxpayers have not notified HMRC.
• The legislation applies retrospectively to protect public services and provide fairness to taxpayers who declared their liability and paid taxes.
• The amendment aims to confirm HMRC's long-standing policy and put legal matters beyond doubt.
• Clause 95 will amend the Taxes Management Act 1970 to allow retrospective application, with an exception for those who have appealed.
• Individuals who accepted charges at face value may not get their money back despite the ruling.
• The number of families affected by the higher income child benefit charge has increased substantially due to the £50,000 threshold not being uprated for nine years.
• Clause 97 adds overseas transfer charge and missing unauthorised payments charge and surcharges to section 30 of the Income Tax Act 2007.
• The amendments take effect prospectively from the 2021-22 tax year.
• Clause 98 introduces regulation-making powers for temporary changes to benefits-in-kind or expenses rules in national emergencies, up to a maximum of two complete tax years.
• Clause 98 grants the Treasury power to modify taxation regulations in response to national emergencies or disasters.
• The measure aims to provide flexibility during significant national events but lacks specific criteria for 'emergency' and 'disaster'.
• The Minister highlights the effectiveness of pandemic measures, mentioning that fraud reduced as schemes were refined.
• The new clause requires the government to assess the impact of vehicle CO2 emissions measures on climate change goals within one year.
• Section 99 and Schedule 16 introduce technical amendments to capital allowances, company car tax, and vehicle excise duty legislation.
• A new comprehensive domestic type approval scheme will be implemented through separate legislation in 2022 by the Department for Transport.
• Clause 100 increases the maximum independent representation on the OTS board by two members.
• New clause 9 requires publishing an assessment of the diversity of OTS membership within a year.
• New clause 10 mandates reviewing the capacity and composition of OTS to handle tax fairness expansion.
• Clauses 101 and 102 set out the legal interpretation and short title of the Bill.
• Chope mentions there are additional new clauses to be discussed following these clauses.
• The tax gap is currently £35 billion.
• New clauses require assessments within 12 months of the Act coming into effect.
• The OBR already provides economic forecasts on Government policy impacts.
• The proposed new clause requires an assessment of the Act's impact on the hospitality sector's tax burden within 12 months.
• The Chancellor has given over £7 billion in business rates relief to the hospitality sector over five years, including almost £1.7 billion in further business rates relief for 2022-23.
• Lucy Frazer argues that existing processes already consider and monitor tax changes' impact on different sectors.
• Christopher Chope co-chaired the Committee.
• The Clerks, Hansard Reporters, Badge Messengers, police and others were thanked for their work.
• The Committee finished sooner than expected.