Political Parties and Elections Bill

The roundabout answer to that is no, but I shall explain why later in my remarks, at which point the hon. Gentleman might like to contribute again. Let me explain why we believe that these provisions will not work. The permissible-donor provisions would impose a three-prong test, which all political parties would have to perform before accepting any political donation. The first test—whether the donor is on the electoral register—was introduced precisely because it was straightforward and easy to implement and to check. When the Political Parties, Elections and Referendums Act was enacted, Parliament chose to use a formulation that would have included, in the category of permissible donors, individuals who were eligible to be on the electoral register—recognising the difficulties that any other formula would create. Registered parties are entitled to a free copy of the electoral register in hard copy or in electronic data from the relevant registration officer for the purposes of complying with the controls on donations. It is therefore relatively straightforward to check whether a donation is from a permissible donor under section 54(2)(a), as currently in force. The two further tests proposed, following the Lords amendments, are not quite so straightforward. The first test relates to residency. According to paragraph 2455 of the explanatory notes to part 14 of the Income Tax Act 2007—that gives some idea of the volume of our current tax legislation—""The question whether or not a person is UK resident is primarily to be determined in accordance with case law. A limited number of statutory rules either supplement or disapply the case law rules in specific circumstances."" There is no statutory definition of "residence". The tests for residence are based on a mixture of legislative interpretation and case law. In addition, Her Majesty's Revenue and Customs has published guidance in HMRC 6 that outlines its view and interpretation of the legislation and case law, which is intended to help people to determine their residence status. There is no register of UK-resident individuals. It would therefore be necessary to provide individuals with information in an attempt to enable them to determine whether they are resident in the UK, and then to require them to make a declaration that they are resident at the time they make a donation. The Secretary of State quite properly mentioned the problems that treasurers would have in verifying residency details. In some circumstances, it may not be possible to establish with certainty whether a person is UK-resident on the date when he or she makes a donation. It is conceivable, albeit unlikely, that people could make a donation to a political party at a time when they believed themselves to be resident in the UK, but it could be determined at a later date that they were not. Such a situation might arise as a result of one of the different tests for determining a person's residence that are summarised in HMRC guidance, which may combine an individual's intention with average-day counting over a four-year period to determine whether the individual is UK-resident. Let me give an example. Those who spend 183 days or more in the UK in a tax year will always be treated as UK-resident. However, those who spend less than 183 days in the UK in a tax year but come to the UK with the intention of spending, on average, at least 91 days, and then spend an average of 91 days or more per tax year over a four-year period, will be treated as being UK-resident from the tax year in which they first came to the UK. If their intention fails and they leave the UK earlier than expected, they may not be treated as UK-resident from the date on which they first came to the UK. It would clearly be impossible to determine with certainty until the end of the four-year period whether a person should be treated as UK-resident according to that test, and that may affect the validity of a donation made to a political party during the period. Another question that might arise is whether there would be any tracing rules that would prevent non-domiciled or non-UK resident husbands or wives, for example, from giving their UK-resident and domiciled spouses money to donate to a political party. Has the Minister considered that issue?