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Tuesday Volume 639 17 April 2018 No. 122 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Tuesday 17 April 2018 © Parliamentary Copyright House of Commons 2018 This publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 163 17 APRIL 2018 164 Mr Hammond: As my hon. Friend will know, the House of Commons UK was one of the first countries to implement the OECD model for country-by-country reporting to tax authorities. Those reports have been required for periods Tuesday 17 April 2018 that started on or after 1 January 2016. On public reporting, the Government are committed to a multilateral The House met at half-past Eleven o’clock approach to ensure that reporting provides comprehensive information and is fair between UK-headquartered and non-UK-headquartered multinationals. We are engaging PRAYERS constructively on the EU proposals for public country- by-country reporting, which we see as a step in the right [MR SPEAKER in the Chair] direction. Sir Vince Cable (Twickenham) (LD): The Chancellor will be aware of President Macron’s proposal for taxing Oral Answers to Questions the revenue of the big internet platforms, which the Chancellor acknowledges are difficult to tax under the existing rules. Are the Government considering building on the entente cordiale of recent days by co-operating TREASURY with and learning from the French model for how we should tax that revenue? The Chancellor of the Exchequer was asked— Mr Hammond: I would not call it a French model; it Tax Avoidance and Evasion is a Franco-German initiative. We have been working closely with the French and the Germans on this issue. 1. Alex Chalk (Cheltenham) (Con): What progress We discussed it at the G20 in Buenos Aires a couple of has been made on reducing tax avoidance and evasion. weeks ago and we will discuss it again at the informal [904774] ECOFIN meeting in Sofia at the end of next week. The Government’s position is that we are supportive of the 8. Nigel Mills (Amber Valley) (Con): What progress EU proposals, but we want to be clear that any such has been made on reducing tax avoidance and evasion. measure can only be a temporary solution. The long-term [904781] solution has to be an agreed multilateral approach to the taxation of the digital economy. That requires us to The Chancellor of the Exchequer (Mr Philip Hammond): get the United States on side, because most of these Since 2010, Her Majesty’s Revenue and Customs has global digital companies are domiciled there. Without secured more than £175 billion that would have gone the United States’ co-operation and support, it will be unpaid and introduced more than 100 new measures to difficult to make any tax system sustainable. crack down on tax avoidance, tax evasion and other forms of non-compliance, so that the tax gap is now at a Neil Gray (Airdrie and Shotts) (SNP): It is critical record low, and one of the lowest in the world, at 6%. that HMRC collects tax correctly. To that end, will Ministers tell me when I am likely to receive a reply to Alex Chalk: It is extremely encouraging that the UK my letter of 6 February regarding the Roadchef case? tax gap is at a record low,but it appears that multinationals HMRC is still to settle with the Roadchef employees are trying to run rings around HMRC, so will my right benefit trust in respect of money paid to HMRC as tax hon. Friend outline what further steps the Government in error. are taking to build on that excellent success? Mr Hammond: My right hon. Friend the Financial Mr Hammond: I am grateful to my hon. Friend for Secretary to the Treasury tells me that he agreed to meet raising this issue. It is a great achievement to have got the hon. Gentleman but has not heard from him to the tax gap down to one of the lowest in the world, but arrange a meeting. Let me reiterate on my right hon. we are not complacent. We are currently calling for Friend’s behalf that he would be happy to meet the hon. evidence on whether online platforms should play a Gentleman to discuss this case. greater role in ensuring tax compliance by their users; we are consulting on an innovative split payment method to tackle online VAT fraud; and we will continue to lead Mr Speaker: Young Philp was standing a moment in the G20 and other forums on seeking agreed multilateral ago. The fella has stopped standing. Do you want to get solutions to the challenge of where and how to tax in there, man? Go for it. global digital companies, which are particularly difficult to tax under the current system. Chris Philp (Croydon South) (Con): Thank you, Mr Speaker; I could hardly resist such encouragement. Nigel Mills: I echo the praise for HMRC’s performance I wished only to say how much I welcomed the in tackling tax avoidance and evasion over recent years. Government’s recent paper, published by the Financial Is the Chancellor becoming more convinced of the Secretary—[Interruption.] There is a serious point. importance of having public country-by-country reporting, The paper on corporate tax and the digital economy so that not only HMRC but customers and campaigners demonstrated again that this country is showing leadership. can see where multinationals are making their profit? I encourage the Treasury to look into working with the That way, we can make sure that they are paying the European Union on a sales tax, and even to consider a right tax in the right countries. user tax, if we can do that more quickly. 165 Oral Answers 17 APRIL 2018 Oral Answers 166 Mr Speaker: The hon. Gentleman’s job application is purposes that we would wish to deter, and HMRC will in the post. always do so. I will update her by letter, hopefully later today. Mr Hammond: Thank you for your very carefully tailored piece of demand stimulation, Mr Speaker. It Tax: Small Businesses was much appreciated for the economy of the Chamber. My hon. Friend is right. As I have already said, 2. Mr Laurence Robertson (Tewkesbury) (Con): If he working with the EU on this interim proposal for a will reduce taxes on small businesses. [904775] turnover-based tax is, we believe, the right thing to do. We have, of course, also introduced an interim measure The Financial Secretary to the Treasury (Mel Stride): of our own, seeking to tax licence fees that are paid to I thank my hon. Friend for his question. The Government low-tax jurisdictions where we judge that the underlying are bearing down tirelessly on the tax burden on businesses basis of the licence fee is economic activity taking place of all sizes, reducing corporation tax from 28% for large in the UK. We have that measure already in place, and companies in 2010 to 19% today, and for small businesses we will continue to work with the EU on its proposed from 21% to 19%. We will go still further, reducing the measure. burden to 17% by 2020. For unincorporated businesses, we are, of course, increasing the personal allowance, in Anneliese Dodds (Oxford East) (Lab/Co-op): Despite the previous Budget, to £11,850. That will increase promising to tighten up on Scottish Limited Partnerships, further to £12,500 in 2020—further relief to many small not a single non-compliant SLP appears to have been businesses. fined, which could have raised up to £2.2 billion. When will SLPs be banned, and what action are the Government Mr Robertson: I thank the Minister for that encouraging taking on other shell companies to stop tax fiddling and answer. Businesses are, of course, unpaid tax collectors money laundering? for the Exchequer and the Federation of Small Businesses recently estimated that businesses spend, on average, three working weeks a year on tax compliance. Is there Mr Hammond: The hon. Lady asks a specific and anything further that the Minister can do to reduce that detailed question about Scottish Limited Partnerships. kind of expensive burden on businesses? The legislation is designed to deter the kind of activity to which she refers. The absence of fines should not be Mel Stride: I thank my hon. Friend for raising the taken as an indication of an absence of activity. As she FSB’s report. I have not only read it, but met the FSB to will know, Her Majesty’s Revenue and Customs always discuss the report in detail. I highlight to the House two seeks, first of all, to deter non-compliant behaviour of its important recommendations: one is around better before it moves into hard compliance. If I may, I will guidance on taxation, and I have tasked officials on that write to her with a more detailed answer on the very mission within HMRC; and the second is Making Tax specific point about Scottish Limited Partnerships. Digital, which we are rolling out for VAT-registered companies in 2019. The report states that this Kirsty Blackman (Aberdeen North) (SNP): To follow “presents an opportunity to simplify and speed up tax compliance.” up on that question about Scottish Limited Partnerships, I am concerned that the Chancellor is not able to stand Ruth George (High Peak) (Lab): Is the Minister not up and talk about tangible action that he is taking on concerned that the Office for Budget Responsibility this matter. This has been a live issue for a very long report into welfare trends from January this year estimates period of time.

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