National Insurance Contributions Bill

I thank the noble Baroness for moving the amendment and raising this issue. Before I deal with the specifics, I should not let pass the concluding remarks on our previous discussion about the difference between ““expedient”” and ““reasonable””, which might imply that the Treasury could act unreasonably in relation to the proposals. I stress that Parliament would make a judgment on that. The amendments in the group are unnecessary and would enable the unscrupulous to manipulate the appeals process in seeking to negate the effect of the Bill. Although new Section 4B(9) automatically redetermines matters previously determined, new Section 4B(11) expressly reserves the ability for regulations to override automatic redetermination, and it is expected that that would happen normally. The reference to the Commissioners for Her Majesty’s Revenue and Customs does not appear readily to fit within the other categories of court and tribunal decisions, which are independent judicial bodies, and I presume that that reference is intended to refer to the General and Special Commissioners, which is the independent body to which contributors and taxpayers appeal in the first instance. The Government have already made it clear in the other place that in so far as General or Special Commissioners’ courts or tribunal decisions have pronounced on the effectiveness and avoidance scheme in the period before regulations are made, they would not wish to override such decisions. This is consistent with the Government’s obligation to make regulations that are compatible with the European Convention on Human Rights. If the reference was meant to be to the Commissioners for Her Majesty’s Revenue and Customs, and dealt with determinations made by an officer of HMRC, those are somewhat different to determinations by the tribunals and appeals bodies, because they are often mechanisms to take matters to appeal. It would not be routinely expected that those would necessarily have to stand in the face of regulations that introduced matters retrospectively. If the amendment were agreed to, it would encourage contributors to pressurise HMRC to litigate cases to obtain the benefit of the protection offered by the amendment, even if HMRC accepted that avoidance schemes were effective under the law that existed prior to the backdated change. Additionally, the entitlements of employees affected by the court or tribunal decision to contributory benefit or statutory payments might be prejudiced by that. That is because those entitlements may otherwise have increased due to the automatic redetermination as a result of earnings being increased retrospectively. In addition to the Government’s stated position of not wishing to override decisions, Amendments Nos. 24 and 29 are unnecessary, because Section 10ZC(7) makes it clear that regulations under Section 10ZC cannot impose or increase the amount of class 1 national insurance. On that basis, I ask the noble Baroness to withdraw her amendment.