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Finance Bill: Government tables 72 amendments to CFC rules

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The Public Bill Committee on the Finance Bill met on 24 May and the following clauses were agreed without amendment:

Clause 11 Gains from contracts for life insurance etc; 12 Settlements – income originating from settlors other than individuals; 13 Champions League final 2013; 14 Cars – security features not to be regarded as accessories; 15 Termination payments to MPs ceasing to hold office; 16 Employment income exemptions – armed forces; and 17 Taxable benefits – ‘the appropriate percentage’ for cars for 2014/15.

The government has tabled 72 amendments to the Finance Bill measures on controlled foreign companies. Clause 180 and Sch 20 occupy almost 100 pages of the Bill.

They provide for a new regime for CFCs to be inserted as Part 9A of TIOPA 2010 and repeal the current rules in ICTA 1988, and ‘provide for the new regime to apply, with necessary adaptations’ to the CTA 2009 rules for foreign permanent establishments of UK companies.

An amendment tabled by the Green Party MP Caroline Lucas, two Liberal Democrats and one SDLP MP, would require that Sch 20 ‘will not come into force until a full impact assessment has been prepared in conjunction with the Department for International Development reviewing the effect on developing countries’ tax revenue, and details of aid and technical assistance being provided to developing countries in order to increase the capability and technical expertise in their tax regimes to collect the taxes that are due in their countries, has been laid before and approved by the House of Commons’.

Lucas’s e-petition for ‘tax justice’, calling on the government to ‘force all multinational companies filing accounts in the UK to reveal their use of tax havens and publish what profits they earn and what tax they pay in each country in which they operate’, has attracted more than 9,000 signatures.

Other amendments

The government has also tabled amendments to clause 24 (companies carrying on businesses of leasing plant or machinery), clause 46 (plant and machinery: long funding leases), schedule  8 (venture capital schemes) and schedule 13 (employer asset-backed contributions).

The Public Bill Committee will meet again on 12 and 14 June.