Corporation Tax Bill

Indeed; that is not the first time that I have made that mistake. The three of us took part in a rather different discussion yesterday. This Bill rewrites a range of corporation tax provisions, including provisions about the computation of profits, small profits relief, losses, group relief and distributions. It also rewrites some provisions that are more specialised—for example, those related to UK real estate investment trusts and others related to avoidance. The Bill has been produced by Her Majesty's Revenue and Customs' tax law rewrite project and continues the project's work to modernise direct tax legislation so that it is clearer and easier to use. Last year, the project completed the first part of the task of rewriting corporation tax when the Corporation Tax Act 2009 was enacted. This Bill completes that work and means that, substantially, the whole of the legislation relating to corporation tax will have been rewritten. Let me remind the House about the work of the tax law rewrite project. It was set up in 1996 by the then Chancellor—the current shadow Business Secretary—following a defeat for the then Government in the Finance Bill Committee, of which I was a member, on an amendment moved by the then hon. Member for Beaconsfield, Tim Smith. The project has, on the whole, continued to enjoy support from across the House since its establishment. Its principal aim is that the rewritten legislation should be far more accessible to users than the source legislation, some of which is dense and difficult to follow. Its success has been widely acknowledged and confirmed by independent market research. To date, the project has rewritten the capital allowances and income tax legislation, and completed the first part of the task of rewriting corporation tax legislation. This Bill is the sixth produced by the project. The project takes great care to ensure that the legislation's effect is essentially unchanged by rewriting, but it can make minor changes in the law where they improve the legislation—for example, to remove ambiguity, to repeal obsolete provisions or to correct minor, unintended anomalies. There are 66 such changes set out in the explanatory notes to this Bill. Major changes will always be matters for a Finance Bill. All proposed changes in the law are considered by both the project's committees, and no minor changes are included in the Bill without the approval of both. The work would have been impossible without considerable input from tax specialists and others, and I express particular thanks to them and to the members of the project's consultative committee, chaired by Miss Robina Dyall, who have ensured that the consultation has been detailed and thorough. The consultative committee includes representatives of small and large businesses, accountants, lawyers and other tax specialists. The time and commitment they have all invested are greatly appreciated. The strategy of the project is set by its steering committee, chaired by the noble Lord Newton of Braintree, which includes Members from both Houses of Parliament and members of the judiciary, of business and consumer groups and of the accountancy and legal professions. I am particularly grateful to Lord Newton, who took over from the noble Lord Howe, for his commitment and guidance, and to the members of his committee. The Joint Committee of both Houses, of which I was a member, chaired by the hon. Member for Chichester (Mr. Tyrie), considered the Bill on 11 January and noted the extensive consultation process to which it had been exposed. It paid close attention to the reasons for rewriting recently enacted legislation, the impact of the rewrite changes proposed in the Bill, and the powers in the Bill to amend the legislation. It also considered all the amendments to the Bill. The Joint Committee concluded that the Bill is a welcome clarification of the existing law, which, as a result, will be easier to use and more accessible. The Committee was satisfied that the changes to the law were of very minor significance and it accepted the amendments, all of which were technical. This Bill is the second of two Bills that rewrite corporation tax legislation. Some of the corporation tax rules in it originally applied to both income tax and corporation tax, but as the tax law rewrite project's previous Acts provided a separate set of provisions for income tax, the income tax provisions have been in the rewrite style, whereas the corresponding corporation tax provisions remained in the original form. The Bill finishes the process of bringing the drafting of corporation tax back into line with that for income tax where the provisions share the same source legislation. The Bill is a worthwhile contribution to modernising direct tax legislation, making it clearer and easier to use, and it maintains the project's excellent record in improving current legislation and has been welcomed by those who use it. I am very grateful for the support that has been shown across the House throughout this exercise, and I commend the Bill to the House.