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Proceeding contribution from Lord McFall of Alcluith (Labour) in the House of Commons on Monday, 21 April 2008. It occurred during Debate on bill on Finance Bill.


Finance Bill

That is utter nonsense. The fact is that 21 million people—four out of five people—will gain from the measures. It is typical of the Scottish National party to say that we can find a solution to the problem by creating further anarchy. We cannot do that; we have to be realistic and grown up about this. The fact is that there is a taxation issue here in the Budget, and we need to be positive about it. Why do I want a solution? I want a solution because poorer people will be affected, and I would have hoped that the hon. Gentleman shared that worthy concept rather than warmongering and trying to create division. He is living up to his past, however, and he will probably continue to do so. I want to move on to better things. The only other measure that I want to talk about today is personal allowances for non-dom taxpayers. Public debate has focused on the issue of non-doms who will be required to pay the £30,000 charge, but many shorter-term non-doms will be affected by the removal of personal allowances, including many with quite small amounts of unremitted foreign income. There has been a focus on the wealthy non-doms, but almost none on the low and middle-income groups who will be affected by the changes. There is a serious risk that HMRC could face the problem of millions of foreign workers either seeking advice or being in breach of the new law. John Whiting, our adviser on the Select Committee, was very clear on the issue of low-income non-doms, and he said that millions of them could be affected. I am aware that the Treasury has estimated that there are 80,000 people with both a UK and a foreign income. That might be because it did not include the unwitting non-doms. The Treasury Select Committee report makes it clear that we feel there has been insufficient consideration of the possible impact of the tax changes in the Budget on middle and lower income groups, and we would like the Government to look at that. By far the largest group of people affected will be the lower and non-income professional workers. An example that has been cited are the typical Polish or Romanian migrant workers who pay UK taxes but who probably do not even know that they are non-doms because they do not know the term, and therefore do not realise that they are about to lose their personal allowance. They will certainly not have any advisers. That group could unwittingly be in breach of the new £2,000 limit for non-doms, and could therefore suddenly lose their UK tax-free allowance. We are asking the Government to be aware of that problem. More importantly, in the light of some of the recent comments about the capability of HMRC, we are asking HMRC to be aware of it. If it is likely to affect millions of people, HMRC needs to understand the problem that is coming down the line.


Secondary information

Type
Proceeding contribution
Reference
474 c1090-1 
Session
2007-08
Chamber / Committee
House of Commons chamber
Subjects
Children Child tax credit Child benefit Alcoholic drinks Charities Capital gains tax Aviation Corporation tax Banks Climate change Capital investment Credit Bingo Air passenger duty Civil partners Families Environment protection Income tax Fuels Inheritance tax Government assistance Double taxation Domicil Economic situation EU emissions trading scheme Forecasts Pensioners Low incomes Poverty Minimum wage Public houses Personal taxation Married people Low pay Public finance New businesses Public sector debt Migrant workers Working tax credit Small businesses Tax allowances Tax avoidance Taxation VAT Supermarkets Dividend tax credits Winter fuel payment Secured loans Revenue and Customs Carbon emissions Research and development tax credit Institute for Fiscal Studies Earnings limits Budget March 2007 Enterprise investment scheme
Legislation
Finance Bill 2007-08
Link
View this Proceeding contribution on www.publications.parliament.uk