Jesse Norman
MP for Hereford and South Herefordshire · Conservative · United Kingdom
“In view of the new Prime Minister’s spending priorities, it now seems highly unlikely that the ruinously expensive current plans will be put to the House before the end of this year. Seven months have already passed with no action.”
“10 North have real spending powers of its own? If the answer is yes, then this will be a new kind of cross-departmental Ministry—perhaps a territorial Ministry, like a regional Government but with no defined scope or mandate. We will need to see the legal instruments delegating Treasury authority and functions to it.”
“I rather fear that, given our longevity and at least the level of banter on the Government side of the Dispatch Box, we will be seen over time as the Morecambe and Wise, or perhaps the two Ronnies, of British politics.”
“The past few weeks have brought news of the deaths of Dolly Parton, Tim Curry and Wendell Berry. I am sure that many colleagues will share my sense of shock and sadness at the loss of those extraordinary figures, but also give great thanks for their lives. Truly, we live in a world of change.”
“10 North will not have spending power of its own, then ultimately the Treasury and the Chancellor will continue to sign off on its public spending and on any taxing matters. Decentralisation is really important, but No. 10 North will not be a means of decentralisation in this scenario; it will be just another layer of Government.”
“But we are not going to cast nasturtiums, in the words of a friend of mine, on any of this nonsense—not even on Baroness Lloyd and the hopeless Building Digital UK, who have entirely failed to address the issue of fibre broadband in neglected parts of my constituency and simply repeated the same language of incompetence and failure to me…”
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“Let me pick up on the nature of some of the protections that exist within the system, of which there are several. One is the rules that apply to business-to-business contracts and that arise from the Business Protection from Misleading Marketing Regulations 2008, which prohibit advertising that misleads traders. There is also the Misrepresentation Act 1967, which may also apply to business-to-business contracts, and which says that if someone has entered into a contract following misrepresentation by the other party, they would be entitled to rescind that contract. Additionally, if they have suffered loss, they can claim damages against the other party. Small businesses can seek help through other channels.”
“Much of the £16 billion of relief that the Government have provided to the retail, hospitality and leisure sectors in response to covid-19—this was picked up by the hon. Member for Strangford (Jim Shannon)—has been applied automatically to rates bills. So there are many automatic methods of applying reliefs currently within the system. The relevance of that to the present debate is that there is no reason why a ratepayer should have to use an agent to claim rate relief. If they believe they are eligible for relief, they should instead contact their local authority. Of course, that is not in any sense to criticise people who have been found to be clients or would-be clients of the predatory organisations that have been highlighted by Members in the debate.”
“An evaluation of the system last year found that it is working and that ratepayers are getting their cases resolved faster, without the automatic need to make appeals. Rate reliefs are applied by individual local authorities, but most of these are automatic or require minimal information from the ratepayer. For example, transitional relief, which is used to phase in the effects of revaluations, is entirely automatic. For small business rate relief, rate- payers need only provide a little information about other properties on which they pay business rates, before being able to claim. All rate bills must explain the various reliefs available, and local authorities have many excellent websites that explain how to claim those reliefs.”
“For example, I can go online and see a detailed valuation of No. 2, Marsham Street, which is the headquarters of the Home Office, and an explanation for how its valuation has been reached. You will be pleased to know, Mr Hollobone, that it has rather a high valuation, as befits its position in central London. If ratepayers are unhappy with their rateable value, there is an online system known as check, challenge and appeal, which allows them to check the facts and, if necessary, to dispute the valuation that has been reached. This system was introduced to provide ratepayers with a service that is easier to use and understand than its predecessor and that enables quicker resolution of cases.”
“It would set a very bad precedent for a Financial Secretary to do so, given the connection to the tax system in a different context. I think Members recognise that, at its core, the system of business rates is a relatively simple and straightforward one. Companies and individuals who occupy non-domestic properties are liable for business rates. The rates bill is the product, in the literal, mathematical sense, of the rateable value of the property and the multiplier for the financial year concerned, offset by any rate reliefs. The rateable value is set by the Valuation Office Agency and, broadly speaking, it is the rental value at a set date —currently 1 April 2015. In cases where businesses are unsure about the rateable value of properties, there are plenty of helpful resources on the website of the Valuation Office Agency.”
“In a slightly more serious vein, I apologise that the Government have not been able to supply a Minister with specific responsibility for this area to respond to the debate. As the hon. Member for Glenrothes (Peter Grant) rightly said, its focus is not on business rates—although there has been the occasional attempt to crowbar the rest of the business rates system in—but on the reduction services aspect that my hon. Friend raised. That aspect is a matter of business regulation, and therefore falls to the Department for Business, Energy and Industrial Strategy. He and the hon. Member for Walthamstow (Stella Creasy) have also focused on some individual cases of predatory practice by specific companies, and they will understand that I cannot comment in any detail on specific cases.”
“I thank my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for having secured this important debate on a matter that is of considerable public interest generally, but also locally in his constituency and to those affected by this company. It is a pleasure to speak in a debate that is not disfigured by party politics; all Members have made very constructive contributions, and I am grateful for them. I will start by expressing my sadness that, inevitably, proceedings elsewhere in this House at the moment are going to be overshadowed by this very important consideration of business rates. I only hope that the media will find some time to indulge Mr Cummings in his comments in between reporting on this vital topic.”
“I think the Government—across my colleagues and myself—need to consider what more can be done, both by themselves and in their further discussions with local authorities.”
“I thank the hon. Lady for her question. I have already said that all rates bills are required to explain the various reliefs available and that local authorities have, in many cases, excellent websites that explain how to claim the reliefs. Of course, the fact that reliefs in the cases I have described are automatic means that they flow through in and of themselves. That is a very attractive feature, where that can be engineered into the system. Where it cannot, it is for good reasons, and it may not be possible. I do not think it is right to suggest—I do not think anyone who has participated in this very thoughtful debate would suggest—that there is any easy fix here, but there is a clear case to be addressed. I thank my hon. Friend the Member for Thirsk and Malton for bringing it to our attention and for raising it with the Government.”
“The hon. Gentleman advances the extraordinary claim that the UK is the only country among the G7 not to have backed the Biden plan. Will he put in the Library the evidence for that claim?”
“It may be of some interest if I point out to them—they can reflect on this—that in 2005-06 under the Labour Government it was 7.5%, so it has fallen dramatically, I am pleased to say. Tax that was not being collected by the Labour Government at that time is now being collected by the Conservative Government of the present day, and a very good thing that is too. That is a record on which they should spend some time pondering. The fact of the matter is that this Government have always made it plain that they will be very tough—as tough as they can be—in order to collect the tax that is due and to make sure that corporations and individuals pay it wherever they are due to.”
“Friend the Member for Devizes (Danny Kruger) rightly picked up, it is a measure that benefits local businesses up and down the UK. He picked Wadworth, a well-known brewer, and rightly so, but there are many, many other businesses for which that is also true. He was absolutely right to highlight that. Let me come on to questions of wider taxation, if I may. There seems to be an astonishing level of ignorance among Members on the Opposition Benches. They seemed to be unaware that the tax gap—the difference between the amount of tax actually collected and the amount of tax that could potentially be collected—is at its lowest rate in our recorded history, at 4.7%.”
“I am grateful to all Members who have taken part in this debate. Let me pick up on several issues that have been raised, starting with the super deduction. You will be aware, Madam Deputy Speaker, as I think some Opposition Members are not, that it has been described by the CBI as “a real catalyst for firms”, while the British Chambers of Commerce said: “We particularly welcome the massive ‘super deduction’ investment incentive.” They are absolutely right. It is a terrible shame that the Labour party has decided to try to tarnish the super deduction, a measure from which many capital-intensive businesses around this country will benefit, especially in the north, the north-west, the north-east and the midlands. As my hon.”
“I thank all Members who have commented or spoken in this debate on freeports. As the House will know, freeports are a very important part of the Government’s policy to level up the British economy and to bring investment, trade and jobs to parts of the country that in many cases have not had the economic vibrancy that we as a nation would have wished. They symbolise and reinforce the opportunities provided by this country’s status as an outward-looking trading nation, open to the world.”
“Friend mentioned some of the measures that HMRC is taking to combat umbrella companies that are disobeying the rules or trading fraudulently, and we are committed to extending the remit of the Employment Agency Standards Inspectorate to support best practice in the area.”
“To contemplate a series of measures that might include a ban on umbrella companies would be a tremendous burden on the legitimate umbrella companies; my right hon. Friend mentioned that that was not his preferred option. It is important to point out that such companies can perform useful payroll functions for agencies, provide choice for individuals and have multiple engagements. Notably, the Low Incomes Tax Reform Group pointed out recently: “For freelance contractors who cannot work for their clients on a sole trader or limited company basis…the option to be able to work through an umbrella can be very valuable.” There is value to umbrella companies, but that is not to say that there is not also abuse. The Government are very focused on that: my right hon.”
“Member for Hornsey and Wood Green (Catherine West) highlighted the situation in Belarus, which is not directly a matter for the Treasury or the Bill, but is obviously a topic of great importance and interest for all Members of this House, as today’s urgent question highlighted. All those points are important to put on the record. I also want to pick up on the important speeches made by my right hon. Friends the Members for Haltemprice and Howden (Mr Davis) and for Chingford and Woodford Green (Sir Iain Duncan Smith). My right hon. Friend the Member for Haltemprice and Howden focused on the prevalence of umbrella companies. It is important to say that there are legitimate reasons why an agency or an individual might wish to use an umbrella company.”
“I remind her that the Government have made an enormous investment in the NHS, over and above the extraordinary interventions supporting the fabric of our society over the past 12 months. We will also have in place a new office for health promotion, designed to support better health and wellbeing across the country. The hon. Member for Ceredigion (Ben Lake) called for greater transparency in relation to reliefs. I have a great deal of personal sympathy with his position; he is absolutely right about the importance of focusing on reliefs. To take a particular example that I know is of great interest to him, he will be aware that we have under way a review of R&D tax reliefs, an important part of policy. The hon.”
“I think that there is a misunderstanding at some very deep level of what the Government are doing, which includes: the Environment Bill; the 10-point plan that the Prime Minister has laid out; the net zero work that the hon. Lady highlighted, which was commissioned within and by the Treasury from a very eminent independent economist; and our work through the new UK Infrastructure Bank, which focuses on green policies and levelling up and for which I was pleased to visit new potential office sites in Leeds only on Thursday. It all amounts to a tremendous emphasis, particularly in the net zero review, on the long-term future of creating a sustainable and productive green economy in this country. It is very important to focus on that. The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) talked about health inequalities.”
“They may or may not be aware that in 2019 the Government carried out a public consultation on whether there should be a 1% non-resident surcharge, and decided on the basis of that consultation that the surcharge should be levied at 2%. That is twice as high as was originally contemplated in the consultation. That also should be seen in the context of the additional tax that people pay on second and third properties, many of which will fall into the scope of this measure. That is an important factor to bear in mind. The hon. Member for Brighton, Pavilion (Caroline Lucas) revisited some of her key themes as regards the climate and environmental policy.”
“I am grateful to all of those who have spoken in this debate. As the right hon. Member for Hayes and Harlington (John McDonnell) has just said, this has been something of a wash-up debate. It is fair to say that it is a bit of an omnibus group of measures pulled together, with many different clauses and issues on which colleagues have wanted to speak. That has made it wide-ranging, but if I may, I am going to focus on some of the key themes from across the various discussions we have had. Let me start with the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) and the question of the non-resident surcharge, which was also highlighted by the hon. Member for Hackney South and Shoreditch (Meg Hillier).”
“It is a very dynamic marketplace, as the right hon. Gentleman will be aware. There are many different aspects to it with which the Government are seeking to engage. One thing that is quite important that I do not think he or others have noticed is that the changes to IR35 that the Government have made have in some quarters been widely welcomed. Let me give an example—it may not be the widest possible welcome, but it is quite noticeable—from the off-payroll advisory firm Qdos, which said: “In recent months the tide has turned, with thousands of businesses now aware of the fact that IR35 reform is manageable”, as it was manageable in the public sector some years before. It is important to recognise that that is also the case.”
“The answer is that it is used to support the NHS, our public services and all the other things that the Government are trying to do to get this country through a difficult moment in our history.”
“There is no suggestion on my part that it is all fine. One cannot make meaningful change to a market that is not performing as one would like and expect everything to be perfectly fine within weeks of the implementation of the measure. The point that I am making is that there are important players in the industry that recognise that—in the quote that I have given—“thousands of businesses” are “now aware… that IR35 reform is manageable”, and so it is. As the hon. Lady will well know, under the previous arrangements there were people who were performing like employees—often working side by side with them—but not paying that tax, and it was important that they did so. If she doubts that, she might want to reflect on the question of what the tax revenue raised from those organisations is used for.”
“It is also worth saying that HMRC has used real time information in ways that were contemplated and discussed earlier in the debate in order to try to be more forward-leaning in this area. We recognise the concern and HMRC is highly active in it, but in many cases these umbrella companies do have a legitimate function, and it is important to recognise that. I think that is it—thank you very much.”
“No, the Government have been clear that there needs to be an extension of the employment agency standards inspectorate in this area, and there may well be operational measures that HMRC needs to continue to undertake. My right hon. Friend will be aware that the Bill contains very considerable additional measures designed elsewhere in the tax system to curb the promotion of tax avoidance schemes, to improve the disclosure of those schemes and to combat organisations that would attempt to derive an unfair advantage of the kind that he has described, so we are absolutely not unaware of the importance of ensuring that people across the board pay appropriate levels of tax. It is also worth saying that none of this really falls within the context of a Finance Bill, let alone the one that we have laid out in front of us.”
“I beg to move, That the Bill be now read the Third time. I thank right hon. and hon. Members who have contributed to the robust but, I would say, good-natured debate throughout this Finance Bill’s passage over the past two months. It has been a speedy but thoroughly effective process. Before I get into the bulk of my speech, I know that the right hon. Member for East Antrim (Sammy Wilson) wants to put a question to me, so let me recognise him.”
“It delivers on the measures announced in the Chancellor’s Budget to protect jobs and livelihoods and to provide additional support to help people and businesses through the pandemic; to begin the process of fixing the public finances; and to lay the foundations of a resilient future economy. This Bill delivers on all those commitments, and I commend it to the House.”
“By and large, this put into law, in relation to Northern Ireland, a set of measures that has already been adopted elsewhere in the United Kingdom, in recognition of commitments that we made to the EU as part of the process of striking our new trade arrangements. That is that, but if he wishes to have further conversation on that, I would of course be delighted to do so. This Finance Bill comes at a crucial juncture for our economy and our public finances as the UK recovers from what is—we must never forget this—the greatest economic and social crisis since world war two and the greatest economic recession in 300 years.”
“I rather regret it, having invited the intervention. No, of course, to engage with this, I would not have recognised the right hon. Gentleman if I had not wanted to take the intervention and I certainly was not avoiding him earlier in the debate. He is right to point out that these provisions have been put into the Bill for the first time. I am pleased to say that they have been given proper consideration in the detail that has been put up, which he alluded to. There is a new measure relating to the distance selling threshold, which will affect a small number of businesses in Northern Ireland.”
“I beg to move, That the draft Double Taxation Relief (Federal Republic of Germany) Order 2021, which was laid before this House on 15 March, be approved.”
“However, the Germany protocol implements a rule to prevent the artificial fragmentation of activities that might result in an overseas business avoiding a taxable presence. Sweden is not in favour of this provision, which is why it is absent from that protocol. These orders make good on the Government’s international commitments to tackle tax avoidance and evasion and to improve dispute resolution. They strengthen the integrity of the UK’s network of double taxation agreements, which plays such an important part in facilitating the cross-border trade and investment that benefits all our nations. I commend the orders to the House.”
“The protocols with both Germany and Sweden give effect to the minimum standard on preventing treaty abuse. This is achieved by inserting a general anti-treaty abuse rule known as the principal purpose test into the double taxation agreement. Both protocols also changed the preamble of each double taxation agreement, which sets out its overriding purpose in order to clarify that the parties do not intend for the agreement to be used to avoid tax. The orders also make changes to the articles in both double taxation agreements that govern how disputes are avoided and resolved. These amendments ensure that the articles are in line with the minimum standard on improving dispute resolution.”
“Usually improvements to our bilateral double taxation agreements recommended by the BEPS project are made under a treaty commonly referred to as the multilateral instrument, which makes it possible to modify double taxation agreements in line with BEPS project provisions without the need for bilateral renegotiation. However, the domestic legal systems of both Germany and Sweden mean that it is much simpler for these countries to modify their double taxation agreements through amending protocols rather than through a multilateral treaty. As a result, the UK Government have agreed with both Germany and Sweden to implement these modifications through the protocols attached to these orders. These changes included introducing minimum standards to prevent avoidance through the abuse of tax treaties and improving the resolution of disputes.”
“Both orders insert important provisions recommended by the OECD’s and G20’s base erosion and profit shifting project—BEPS—into existing double taxation agreements. For those Members who may, surprisingly, be unfamiliar with the BEPS project, it was an international effort to equip countries with the right domestic and international regulations to tackle tax avoidance. The BEPS provisions ensure that double taxation agreements fulfil their main purpose of facilitating global trade and investment. In addition, the provisions simultaneously limit the opportunity for the agreements to be used for tax evasion or avoidance.”
“In a way, that is as it should be, because their purpose is to secure and safeguard trade and to prevent abuse; they are not, in and of themselves, tax revenue-raising measures. Finally, the hon. Gentleman asked about the global minimum tax rate and whether I would expand on my remarks in Committee of the whole House. I am not going to do that, because I do not think it is appropriate for Ministers to comment on tax policy in flight, as it were. We have said we very much welcome the proactive stance that the Biden Administration are taking towards this issue. We have been a very strong advocate for these wider measures—the two pillars, pillar one and pillar two—in the OECD and the G20. I know the Chancellor feels strongly about the importance of our leadership of the G7 as a way of consolidating this progress in tax.”
“We are deploying it widely across double taxation agreements, and it has much of the force of the measure that she describes. The hon. Member for Ealing North raised the wider question of scrutiny. If I may say so, the argument would have more force if any other Opposition Members had chosen to speak in this debate and to exercise that scrutiny. I think that in general, these matters, for the reasons I have described, are tolerably well understood. We have a multilateral instrument, the measures follow a common format, and opportunity is given to Members across the House, including from the Opposition parties, to offer scrutiny. They can choose to exercise that or not. In relation to revenue, the hon. Gentleman will see that the explanatory notes say that there are no new tax burdens imposed by these measures.”
“In this case, because these measures sit alongside a host of other instruments, including the multilateral instrument, which was debated in the House, it is certainly true that there is a degree of scrutiny and awareness—or there could be a degree of scrutiny and awareness—associated with them. The hon. Member for Aberdeen North also mentioned the question of a general anti-avoidance rule. I am sure she knows that it has been an important feature of our approach to double taxation agreements that we have included a principal purpose test in tax treaties, either through bilateral negotiation or through the multilateral instrument. That itself is a very important, wide anti-abuse measure, developed through the BEPS project, which protects a treaty against the abuse of its provisions.”
“The hon. Lady raised a question that the hon. Member for Ealing North (James Murray) also raised about explanatory notes. Both Members will have seen that, actually, both these measures have quite full explanatory memorandums associated with them. Of course, there is always a balance to be struck between the depth and detail into which an explanatory memorandum goes and the desire not to provide so much detail that it becomes illegible or incomprehensible to a normal reader. I think the point is constantly right to be borne in mind that we should be as clear and explicit as possible on these matters. The point is very well made. It is a point that we have pushed very hard, and certainly I and colleagues have pushed very hard with Her Majesty’s Revenue and Customs in the work that it does more widely on guidance.”
“I very much thank the two hon. Members who have spoken in the debate. May I start, Madam Deputy Speaker, by associating myself very much with the remarks that you made to the hon. Member for Aberdeen North (Kirsty Blackman)? I think it is absolutely in order and right for her to bring this very important issue back to the House. To do so in such a personal way only gives it additional force. I doubt that there is a Member of this House whose own life has not been affected in one way or another by the concerns that she describes—the black dog of depression or whatever it may be—either personally or among their family or friends. The diversity of opinion in this House is something we all welcome, but so too should there be diversity in our recognition of other people and their feelings and suffering, so I very much thank her for that.”
“I am just winding up. If the hon. Lady does not mind, I will finish up. We will therefore continue to press forward on this issue. Question put and agreed to.”
“It is right that HMRC has in place appropriate penalties to discourage such behaviour. I therefore move that these clauses and schedules stand part of the Bill.”
“Therefore, we do not believe that a review of the type being proposed is necessary and we urge Members to reject the new clause. Finally, I will briefly respond to amendment 26, proposed by the Opposition. It relates to clause 114 and schedule 26, which deal in consequential amendments, removing redundant references to the VAT default surcharge, which of course is being replaced by clauses 112 and 113 in the Bill. The amendment would confusingly and mistakenly retain references to the repealed default surcharge. Therefore, it serves no purpose and I urge Members to reject it. As many in this Committee will be aware, the vast majority of taxpayers fulfil their obligations by submitting their returns and paying their taxes on time. Therefore, these changes should only affect a small number who do not do so.”
“The Government are committed to open policy making and we ensure that systematic evaluation of the effectiveness of policy is built into the policy-making process at every stage. With regard to new clause 6, the Government have set out, within the tax information and impact note published at Budget 2021, that this measure will be monitored through information gathered from HMRC systems, and that implementation will be monitored closely, collecting stakeholder feedback to inform future policy development. Furthermore, the first financial penalties levied under these measures will not occur until after six months of the Act being passed, so it simply would not be possible to provide any worthwhile estimates of tax saved in that time period. Corporation tax is currently out of scope of these reforms.”
“New clause 6 would require the Government to review the effects of the changes being made by these measures on reducing the tax gap and, within six months of the Act being passed, report to the House on these changes, including the expected change in corporation tax and income tax being paid that is attributable to the provisions. The new clause specifies that these should include taxes payable by owners and members of Scottish limited partnerships. The Government publish information each year on the tax gap. Sanctions are only one of a series of tools used to tackle non-compliance and reduce the tax gap, so the effect of the changes made by these measures should not be viewed in isolation.”
“HMRC must strike a balance between supporting taxpayers who are struggling to meet their obligations and identifying those who are deliberately avoiding them. If a taxpayer has not upheld a “time to pay” arrangement and has not approached HMRC to amend that arrangement to reflect a change in their circumstances, it is appropriate that a penalty is applied. This is designed to encourage anyone who may be struggling to meet their obligations to engage actively with HMRC in order to agree further support. It is also designed to ensure that those taxpayers who regularly meet their obligations are not put at an unfair disadvantage. I turn now to new clause 6, which relates to clauses 112 to 114, and to schedules 23 to 26 and 28.”
“Amendment 25 also relates to clause 113 and schedule 25, and would remove any penalty for a taxpayer who agrees a “time to pay” arrangement with HMRC but then fails to fulfil the terms of that agreement. Of course, some taxpayers may encounter difficulty in paying their taxes on time and HMRC recognises that there are often valid reasons for that. “Time to pay” arrangements are designed to help taxpayers who are struggling to meet their obligations and HMRC strongly encourages those taxpayers to talk to HMRC as soon as possible, if they need to do so. HMRC will always look to agree a “time to pay” arrangement tailored to the taxpayer’s needs. If a taxpayer’s circumstances change, “time to pay” arrangements can themselves be renegotiated.”
“Our approach has evolved in line with feedback from several consultations and it strikes a balance between encouraging early engagement with HMRC and penalising those who avoid doing so. The first late payment penalty is essential to incentivise compliance and protect the public finances. Although the vast majority of taxpayers comply with their tax obligations and try their best, a minority consistently fail to meet their tax obligations. If they faced no consequences, they would have an unfair advantage over the vast majority of taxpayers who follow the rules and pay on time. As I mentioned earlier, it is also the case that no penalty will be charged if a taxpayer approaches HMRC to request a “time to pay” arrangement within the first 15 days.”
“The two-year time limit strikes a careful balance between giving taxpayers sufficient notice that a penalty has accrued and allowing adequate time for HMRC to make an assessment. That helps to ensure the integrity of the tax system and benefits us all. In the vast majority of cases, penalties will be levied quickly and automatically close to the date of any missed obligation. Of course, there will be times when HMRC needs longer to conduct its investigations, which is why the two-year time limit is required. I therefore urge Members to reject the amendment. Amendments 3 to 14 relate to clause 113 and schedule 25, and would remove the first penalty entirely, leaving only the second penalty.”
“As long as taxpayers have made reasonable efforts to fulfil their obligations, the first late payment penalty of 2% will not be applied after 15 days. In effect, therefore, for the first year taxpayers will have 30 days to contact HMRC before any late payment penalties are charged. That is a proportionate and balanced approach, ensuring the new regime is fair to all. If I may, I will respond briefly to amendments that have been tabled in this group. Amendment 24, which relates to schedule 23 to clause 112, would reduce the time limit for HMRC to assess a penalty for failure to make a return from two years to three months. That two-year time limit, however, is long standing, and the Government do not intend to change it through these reforms.”