EMBARGOED UNTIL 00.01
TUESDAY 17 JUNE 2003
NEW LORDS COMMITTEE REPORTS ON THE FINANCE BILL
For the first time a House of Lords Committee has reported on aspects of the Finance Bill which underpins the UK budget.
The Committee, which included four former Treasury Ministers, examined the key issues of the new Stamp Duty Land Tax, VAT evasion and Mandatory Electronic Payments of PAYE by larger employers.
Lord Peston, who chaired the inquiry, said:
"My Committee's timely report is intended to contribute constructively to the remaining consideration of the Finance Bill in both Houses of Parliament.
"We support the Government's attempts to crack down on supply chain frauds which cause VAT losses estimated at a staggering £2.5 billion a year. But a better balance has to be struck between that effort and protecting the rights of legitimate traders.
"We also welcome modernisation of Stamp Duty: Britain's oldest tax, dating back to 1694. The new Stamp Duty Land Tax has important consequences for the commercial property market and developers. The Inland Revenue assure us it will be ready by 1 December 2003, but we have found widespread concern about this in professional and trade circles. It's better to get it right than to stick to an arbitrary target date, so we recommend a review in the Autumn to make sure everything is properly on track."
The Committee reported on three main areas:
We support the efforts to curb supply chain abuses but call for enhanced safeguards for innocent traders, including extended judicial oversight by the VAT and Duties Tribunal
These extra safeguards might also help allay concerns raised with us over possible creeping extension of the range of goods and services to be covered by these new measures.
Stamp Duty Land Tax
Some of the main provisions of the tax have already passed through the Commons without being scrutinised
Commercial property transactions should not be frustrated by lack of certainty over tax liability. We suggest that the Revenue should look at new clearance procedures to reduce uncertainty
Other questions still need to be tackled: for example, turnover-based lease rentals, complex commercial property transactions and apparent inconsistencies over disadvantaged areas relief.
Mandatory Electronic Payment of PAYE by Large Employers
NOTES FOR EDITORS:
1. The members of the Economic Affairs Sub-Committee on the Finance Bill who conducted this inquiry were Lord Peston (Chairman), Lord Barnett, Baroness Hogg, Lord Jones, Lord Newby, Lord Oakeshott of Seagrove Bay, Baroness O'Cathain, Lord Roll of Ipsden, Lord Sheldon, Lord Sheppard of Didgemere and Lord Wakeham.
2. The report is published by the Stationery Office:
The Finance Bill 2003, Select Committee on Economic Affairs, 3rd Report, Session 2002-03, HL Paper 121-I, ISBN 0-10-442342-0, price £9.00. The full text of the report will be available on the internet via
www.parliament.uk shortly after publication.
3. Matters relating to taxation and public expenditure are often considered by Lords Select Committees in the context of other inquiries. But this is the first time that a Lords Committee has specifically considered any aspects of a Finance Bill. The Committee's terms of reference were limited to technical issues of tax administration, clarification or simplification and did not include the rates or incidence of tax.
4. The origins of this Sub-Committee stem from the recommendations on the scrutiny of financial legislation made by a Report of the Leader's Group on the Working Practices of the House, published in April 2002.
Further information from:
- Gordon Baker
Clerk of the Committee, on 020 7219 6635
- Jillian Bailey
Press and Publicity Officer (Committees), on 020 7219 8659