• Taxing work in Parliament

    Mid Devon Advertiser
    20 October 2017

    Last week I was flat out in the House of Commons taking the Finance Bill through the Committee of the Whole House. This is the stage of a bill’s progress through Parliament in which parts of the legislation (as selected by the opposition) are scrutinised in the main chamber with every MP serving as a committee member with all able to contribute. During this stage of the bill amendments and proposed new clauses are tabled and these are the subject of, in this case, up to 6 hours of debate. The areas selected were Termination Payments, Business Investment Relief for non doms and proposals for future changes in Northern Ireland’s corporation tax rates to be made available to small businesses. The Termination Payment changes are an anti tax avoidance measure to stamp out the situation where unscrupulous employers dress up payments of earnings as payments as compensation for loss of office in order to avoid tax for both employer and employee. All statutory redundancy payments, discrimination awards and up to £30,000 in other termination payments are entirely tax free under existing arrangements and these will continue to be so ensuring that the vast majority of those losing employment will continue to benefit from entirely tax free payments. This did not stop the opposition dressing the measure up as an attack on workers who have lost their job. The Business Investment Relief changes will ensure that there are greater flexibilities available to non doms who bring money into the UK to invest in qualifying UK businesses. Over £1.5 billion in business investment has been brought into the UK through this scheme and all this money is investment that would otherwise have gone to other countries instead. Its expansion will mean more money going into UK companies and more UK jobs being created. There were several divisions (votes) during the day – in all of which the Government prevailed. Next week I start the process of taking the remaining elements of the bill through the committee ‘upstairs’ in which a committee of a dozen or so MPs will scrutinise the remainder of the bill line by line and consider further suggested amendments and new clauses. The bill is highly technical and runs to over 650 pages and so there is a lot to cover!

    Much of my time is also being spent on preparing with other Treasury ministers and the Chancellor for the budget which will be presented on 22nd November. As the minister with oversight of UK taxes, taxation is the area where I spend most of my focus. A budget must ensure that we keep to our fiscal plan (i.e. keep on top of borrowings and bearing down on the deficit) and carefully balance additional expenditure against revenue raisers such as tax. On a daily basis I consider a number of possible tax measures thinking carefully about who they will effect and how much they raise. As budget day approaches this work will become much more intensive.