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Interdepartmental Co-operation

Volume 459: debated on Thursday 3 May 2007

8. What recent discussions he has had with the Chancellor of the Exchequer on work undertaken jointly by his Department and the Treasury. (135436)

I think that we expected that response. What work has the DTI undertaken with the Treasury to address the problems with business taxation that were identified by the Tax Reform Commission last year when it said that

“the whole ‘tone’ of tax administration is becoming less friendly to business; and the system is increasingly complex, unstable and distorting”?

Does the Secretary of State think that this year’s Budget has made business taxation more complex or less?

No, I think that the Budget this year introduced a number of sensible reforms, particularly the decisions to reduce the mainstream corporation tax rate and the personal income tax rate. Those are very welcome reforms. The hon. Gentleman does have a good point about the administration of tax. That is why Sir David Varney, the former chairman of Her Majesty’s Revenue and Customs, has been working to introduce a new system that will provide more certainty for business taxpayers. When businesses, for example, decide on a course of action, an acquisition, a development or so on, they can seek advice and have clarity as to how Revenue and Customs will treat their tax position. I think that that has been widely welcomed.