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Tax Law Rewrite Project

Volume 488: debated on Tuesday 3 March 2009

I am pleased to tell the House that Her Majesty’s Revenue and Customs will shortly publish drafts of the Tax Law Rewrite project’s sixth and seventh Bills.

These two Bills are a major landmark in the task of rewriting the legislation for the two main direct taxes which are of great importance to individuals and businesses. The project has, since its inception in 1996, been rewriting the income tax and corporation tax codes in a clearer and more understandable form, making them more accessible than at any time in recent memory. The Bills, when enacted, will complete this work.

One is the Corporation Tax Bill which is the second of two Bills by that name which will rewrite substantially the whole of the corporation tax code. (The first is presently before Parliament and will become the Corporation Tax Act 2009.) It is expected to become the Corporation Tax Act 2010. It includes provisions about the treatment of losses and gifts to charities, reliefs, distributions, particular types of companies and activities, avoidance and definitions.

The second is the Taxation (International and Other Provisions) Bill which includes provisions about double taxation relief, transfer pricing, advance pricing agreements and tax arbitrage. The Bill also seeks to help users by relocating and where appropriate rewriting provisions which would otherwise have been left unhelpfully in the Income and Corporation Taxes Act or one of the Finance Acts.

It is planned to introduce the Bills into Parliament by the end of 2009. Four previous Bills of the project were enacted as the Capital Allowances Act 2001, the Income Tax (Earnings and Pensions) Act 2003, the Income Tax (Trading and Other Income) Act 2005 and the Income Tax Act 2007.

The scope of these new Bills and the timing of consultation were agreed with the project's Consultative and Steering Committees which together include the main representative bodies and other users. They benefit from a style and structure that has been developed as a result of consultation over the previous rewrite Bills. Earlier versions of the legislation in these new Bills have been revised in the light of comments and suggestions from tax professionals and others who engaged in the consultation process. This has only been possible thanks to the close collaboration and co-operation between the project team and tax practitioners, the legal profession and business representatives.