Tax Deduction Certificates(Building Industry)

HC Deb 11 November 1976 vol 919 cc649-50

14. Mr. Hastings

asked the Chancellor of the Exchequer whether he will reconsider the position with regard to the next tax deduction certificate in view of public concern, and the opposition which it has aroused in the building industry.

Mr. Robert Sheldon

No, Sir. The new certificate is essential to deal with those on the "lump" who are evading the payment of tax and National Insurance contributions.

Mr. Hastings

Is the Minister aware of the deep suspicions that exist among contractors and sub-contractors, particularly about the photographs that are to be required? Has the Minister seen the alternative suggestions that have been put forward by the National Federation of the Self-Employed, which seem to me to be perfectly reasonable? Will he now consider postponing this scheme and appointing a representative from the Federation to his Advisory Construction Manpower Board so that the difficulties can be frankly discussed before the scheme is imposed upon the industry? Surely that is the most sensible way to proceed.

Mr. Sheldon

The hon. Gentleman will know of the problems that we have had over the past five years in the levels of tax evasion. The difficulties experienced by the previous Government have to be put right because of the widespread evasion by a limited number of firms. I am always prepared to look at further suggestions, and if the hon. Gentleman cares to write to me to explain his ideas, I shall be prepared to consider them. But it is essential that we end the widespread evasion that has been taking place.

Mr. Paul Dean

Does the Minister realise that present evidence suggests that a significant number of self-employed people in the construction industry will be deprived of their livelihood, through no fault of their own, because of the harsh operation of the regulations? Will he postpone their operation until he has sorted out the present harshness.

Mr. Sheldon

I am grateful to the hon. Gentleman for giving me the opportunity to correct this misunderstanding. The certificate, I repeat, is not a certificate to work. Income tax can be deducted at source if such a person is unable to obtain a certificate. He is still able to earn his livelihood in just the same way. The arrangements that we have explained to the House are to ensure that income tax is collected and not evaded.

Mr. George Rodgers

Is there any evidence of public concern as implied in the original Question, as distinct from concern within the particular trade or industry?

Mr. Sheldon

I have had a number of representations, as my hon. Friend will understand, some of which concerned the nature of the photograph. But, of course, it is essential that we end once and for all this more than five-year-old scandal, whereby large sums of money have been lost. Finally, we must come to a proper conclusion, and the method announced by the Government is, we believe, the best way to proceed.