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Businesses: Tax Liability

Volume 737: debated on Wednesday 13 June 2012


Asked By

To ask Her Majesty’s Government what is the normal notice period that HM Revenue and Customs gives to businesses in relation to changes in their tax liability.

My Lords, changes in tax law are normally confirmed at least three months before the tax year in which they come into effect or the publication of the Finance Bill in which they are to be included. The Government normally announce such changes at Budget for enactment through the following year’s Finance Bill. The Government also consult on most changes to tax law, unless they are straightforward changes, revenue protection measures or areas where there is a risk of forestalling.

On 18 May, HMRC issued new guidance concerning the tax rates to be charged to the waste industry with immediate effect. It resulted in a 2,500% tax increase and put jobs and businesses at risk. I raised it in the House on 29 May. The Government then did a U-turn—the official line was that they clarified their position. The problem is that half the industry does not accept the veracity of the clarification of the Government’s guidance. Does the Minister accept that we have a serious problem and will he agree to facilitate a meeting between me, my good friend the Member of Parliament for Mitcham and Morden and the relevant Treasury Minister with a representative of the industry to sort out this shambles of all shambles?

My Lords, before I get what I might call my noble friend Lady Trumpington’s question, “What on earth are we talking about?”, it might be helpful to give a little background. Landfill tax is payable by landfill site operators per tonne of waste put into their sites. It is sometimes called by the press “the skip tax”.

Recently HMRC responded to concerns expressed by some landfill operators that certain companies were not paying the correct rate of tax and in that process were disadvantaging those companies that were paying the correct rate of tax. There is no new tax policy here. The rates of landfill tax have not changed, but HMRC issued guidance in response to that request. Since the issuance of that guidance, there has been some misinterpretation which HMRC has sought to correct. I appreciate that there may still be some residual concerns, and I am very happy to facilitate a meeting. Because it is an operational matter, I suggest that the person who it would be most helpful to meet is the director at HMRC who is directly responsible, and I will help to set that up.

This Question concerns Customs and Excise. Is the Minister aware that a report published by the Institute of Fiscal Studies last year pointed out that, while some unhealthy foods are subject to the standard rate for VAT, there are many other unhealthy foods which are zero-rated? Would he care to suggest to the Chancellor of the Exchequer that no unhealthy foods should be zero-rated? I am sure that the Chancellor could do with the additional revenue.

My Lords, I think that we probably call it Her Majesty’s Revenue and Customs these days. That aside, I will of course pass on my noble friend’s representations on this important matter.

My Lords, will the Minister tell the House whether the decision by Her Majesty’s Revenue and Customs to put Rangers Football Club into liquidation was made by officials or was referred to Ministers?

My Lords, as previously in answer to any football club tax questions, I can say only that I cannot talk about individual taxpayer matters for reasons of confidentiality, which the noble Lord, Lord Foulkes of Cumnock, well knows.