Political Parties and Elections Bill

My Lords, I am explaining that a very large number of people do not fill in tax returns, but there may well be people who, as in the Australian example that I gave to the noble Lord, are not domiciled in the country but pay UK tax through PAYE and have done for many years. That would mean that HMRC would have to change the way in which it did things at large public expense and with new IT if the amendments were to be carried and became law. Requiring donors to tick a box on their return would not overcome the retrospection objection to which I have referred. People are required to complete a return 10 months after the end of a tax year. If an individual makes a donation in the middle of one tax year, it might not be reasonable to expect them to know at that point what their residence status would be by the end of the year. Even if this information were collected, it would, as things stand, be illegal for HMRC to share it with the Electoral Commission. The noble Lord, Lord Tyler, noted tonight as well as in Grand Committee that the House of Lords Appointments Commission announced recently that it would strengthen the existing criteria requiring that nominees should be resident in the UK for taxation purposes. He argued that this process sets a precedent that could be used to confirm the permissibility of donors. However, the number of people seeking membership of your Lordships’ House is far smaller than the number who make donations to political parties. As we have heard, Electoral Commission data suggest that more than 1,000 individual donations would need verification annually. By contrast, fewer than 10 people are appointed to this House annually on the recommendations of the Appointments Commission. Indeed, the relationship between the Appointments Commission and HMRC is not a formal gateway for sharing information. HMRC simply informs the commission whether an individual meets all the criteria. These criteria include residence, but also whether there is an indication of any tax irregularities such as an investigation being under way. It is important to note that HMRC’s response does not go into detail other than to give a yes or no response to the query as to whether there are any issues of concern in an individual’s tax records.