TRANSFER OF A BUSINESS AS A GOING CONCERN (Hansard, 23 April 2001)

§ Mr. Letwin

I do not want to detain the Committee long on clause 39. We have a major issue with clause 40, which 110 we want to move on to, but I want briefly to ask a question. There is a perfectly reasonable requirement in clause 39—perhaps the Financial Secretary will confirm that this is in common with much previous legislation—that if one is going to hand over one's business to someone else, one has to tell Customs and Excise about it. I should put it another way: rather unfortunately, the clause allows the commissioners to make regulations that will have that effect. Let me make a general point, and say that throughout the Bill, as in a good deal of other legislation, there is reference to far too much regulation on the part of the commissioners—but that is an overall feature of indirect taxation, for which the Financial Secretary and his colleagues should not be blamed personally.

I am concerned about a specific matter. If the Financial Secretary will forgive me, I shall return to the hypothetical case of Mr. Jones. Mr. Jones did not think that he was in the business; he thought that he was in another business, which was exempt. The commissioners judged him to be intending to be in a business that would qualify.

Let us move the story on a bit. Mr. Jones had to register—if he had not, he would have been fined—and he had to deposit a security. As it turns out, that was for nothing, because Mr. Jones has never produced anything taxable. He has never produced anything that, on detailed inspection, could be shown to be an aggregate for the purposes of the Bill. I think that there will be many such cases: by the time it is found that those concerned are not caught by the legislation, they will have been subjected to a huge amount of intrusion.

Does clause 39 constitute the next intrusion? Let us suppose that poor Mr. Jones, having at last—or so he thinks—reached the end of all that unnecessary and unjustified intrusion by Customs and Excise, wants to sell the business because he is so fed up, or for some other reason. Will he then—because he has been registered under the regulations for which clause 39 provides—have to inform Customs and Excise that he has sold the business, so that the next person along the line may be subject to exactly the same unnecessary harassment, or will the regulations at least prevent that from happening if the person in question, although registered, has never had to pay any of this wretched tax?