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Finance Bill completes second reading

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The Finance Bill completed its second reading in the House of Commons on 11 October, after five hours of debate. The Bill’s progress can be followed via

David Gauke, the Exchequer Secretary to the Treasury, told MPs that nine clauses had been modified after more than 60 responses were received to the draft Bill, published in July. The Bill supported the Government’s aims of helping businesses and promoting fairness, he said.

‘Clause 10 provides support for real estate investment trusts by relaxing their distribution requirements. Clause 13 removes intellectual property conditions linked to research and development tax credits, enabling more small companies to claim. Clause 11 fixes issues in the worldwide debt cap regime to allow it to operate properly. The changes affect businesses large and small. Clause 9 removes an unintended tax charge from company distributions, and clause 7 makes changes to the venture capital schemes to guarantee state aid approval.’

HMRC staffing
Angela Eagle, the newly-appointed Shadow Chief Secretary to the Treasury, said a ‘notable omission’ from the Bill was any reference to ‘increasing the resources which will allow HMRC to build on its already excellent work to tackle the tax gap’.

She added: ‘HMRC increased the yield from compliance interventions by 60% in the three years to 2008/09. However, we all know there is more to be done and we would all support sensible measures to make such work even more effective.'

Nothing in the Bill signalled the Government's determination to launch a further crackdown, she said.

‘The worry is that the 25% to 40% cuts in departmental staffing due to be announced in the forthcoming spending review will seriously damage HMRC's ability to maintain its work on improving tax collection, let alone to launch a further successful crackdown on the tax cheats.’