HL Deb 30 November 2000 vol 619 cc1469-72

After section 379 of the Income and Corporation Taxes Act 1988 (interpretation of sections 369 to 378) there shall be inserted—

Tax relief on political donations.

379AA.—(1) Tax relief shall be available to an individual ("the donor") in accordance with this section on qualifying political donations made by him of up to £500 in any year of assessment.

(2) A donation is a qualifying political donation for the purposes of this section if it is made to a registered political party (other than a minor party) and—

  1. (a) it takes the form of the payment of a sum of money,
  2. (b) it is not subject to a condition as to repayment.
  3. (c) it is not conditional on or associated with, or part of an arrangement involving, the acquisition of property by the political party, its members or accounting units, otherwise than by way of gift, from the donor or a person connected with him, and
  4. (d) the donor is a registered elector.

(3) For the purposes of this section a political party is an eligible political party if—

  1. (a) it is a registered party within the meaning of section 22 of this Act other than a minor party, and
    2. 1470
  2. (b) at the last general election preceding the donation in question—
    1. (i) two members of that party were elected to the House of Commons, or
    2. (ii) one member of that party was elected to the House of Commons and not less than 150,000 votes were given to candidates who were members of that party.

(4) If an individual makes a qualifying donation he shall be entitled, on making the payment, to deduct and retain out of it a sum equal to basic rate tax thereon.

(5) Where a sum is deducted under subsection (4) above, the sum deducted shall be treated as income tax paid by the person to whom the payment is made.

(6) Any person by whom a qualifying donation is received shall be entitled to recover from the Board, in accordance with regulations, an amount which by virtue of subsection (5) above is treated as income tax paid by him; and any amount so recovered shall be treated for the purposes of the Tax Acts in like manner as the qualifying political donation to which it relates.

(7) The following provisions of the Taxes Management Act 1970, namely—

  1. (a) section 29(1)(c) (excessive relief) as it has effect apart from section 29(2) to (10) of that Act,
  2. (b) section 30 (tax paid in error, etc) apart from subsection (1B),
  3. (c) section 86 (interest), and
  4. (d) section 95 (incorrect return or accounts),
shall apply in relation to an amount which is paid to any person by the Board as an amount recoverable in accordance with regulations made by virtue of subsection (6) above but to which that person is not entitled as if it were income tax which ought not to have been repaid and, where that amount was claimed by that person, as if it had been repaid as respects a chargeable period as a relief which was not due.

(8) In the application of section 86 of the Taxes Management Act 1970 by virtue of section (7) above in relation to sums due and payable by virtue of an assessment made for the whole or part of a year of assessment ("the relevant year of assessment") under section 29(1)(c) or 30 of that Act, as applied by that subsection, the relevant date—

  1. (a) is 1st January in the relevant year of assessment in a case where the person falling within subsection (5) above has made a relevant interim claim; and
  2. (b) in any other case is the later of the following dates, that is to say—
    1. (i) 1st January in the relevant year of assessment; or
    2. (ii) the date of the making of the payment by the Board which gives rise to the assessment.

(9) The Board may by regulations make provision—

  1. (a) for the purposes of any provision of this section which relates to any matter or thing to be specified by or done in accordance with regulations;
  2. (b) with respect to the furnishing of information by donors or recipients, including, in the case of recipients, the inspection of books, documents and other records on behalf of the Board; and
  3. (c) generally for giving effect to this section.

(10) In this section— financial year" in relation to any person, means a financial year of that person for the purposes of the relevant regulations; interim claim" means an interim claim within the meaning of the relevant regulations; relevant interim claim" means, in relation to an assessment made for a period coterminous with, or falling wholly within, a person's financial year, an interim claim made for a period falling wholly or partly within that financial year; and the relevant regulations" means regulations made under subsection (9) above.

(11) Section 839 of this Act shall apply for the purposes of this section to determine whether one person is connected with another."")

The Commons disagreed to this amendment for the following reason—

130A Because it interferes with the public revenue, and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient.

Lord Bassam of Brighton

My Lords, I beg to move that the House do not insist on their Amendment No. 130 to which the Commons have disagreed for their reason numbered 130A. The other place has disagreed with your Lordships' Amendment No. 130 because it interferes with the public revenue. It is not, therefore, a matter for this House. Taxation and tax relief are for the elected House alone to determine.

Moved, That the House do not insist on their Amendment No. 130 to which the Commons have disagreed for their reason numbered 130A.—(Lord Bassam of Brighton.)

Lord Goodhart

My Lords, since another place has relied on privilege, there is nothing further that can be done with the amendment. I simply express the hope that the Chancellor of the Exchequer will consider the matter carefully and will persuade himself by the time of the next Budget that it is appropriate to grant tax relief for the reasons which have been expressed clearly in debates in your Lordships' House.

Lord Cope of Berkeley

My Lords, I agree with the noble Lord, Lord Goodhart. It clearly would be right for this House to defer to the privilege of the Commons which it has claimed in this matter and not to insist on the amendment.

At same time we believe that in recommending this tax relief the Neill committee was on to a good point. It should happen. However, the issue was discussed in our earlier debates. I do not need to repeat the arguments except to say that we continue to support the policy. We hope that in a more appropriate Bill, perhaps a finance Bill, the Chancellor of the Exchequer will look favourably on the proposals of the Neill committee.

Lord Simon of Glaisdale

My Lords, the Commons reason is expressed very widely and, I think, unusually, but they are undoubtedly entitled to insist on their financial privilege in this matter. I therefore respectfully agree with what the two noble Lords have said.

Lord Bassam of Brighton

My Lords, I am grateful for the comments of noble Lords in this brief debate. To pick up the point made by the noble Lord, Lord Goodhart, the Government set out their priorities in the spending review and the Pre-Budget Report. Noble Lords are welcome at any time to make representations on particular matters of this nature. There is nothing else that can be properly said on the issue at this stage.

On Question, Motion agreed to.

Lord Carter

My Lords, I am sure that the House is aware that we shall now have to adjourn during pleasure to await the Commons message on the Disqualifications Bill. That is likely to arrive at about four o'clock, so I propose to adjourn until then. We will then resume to receive the message and adjourn again for about 30 minutes to enable any amendments to be tabled. We shall then continue with the consideration of the Commons amendments. I beg to move that the House do now adjourn during pleasure until 4 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 11.41 a.m. to 4 p m.]

Lord Carter

My Lords, I understand that we have to wait to receive a Message from the Commons. The advice is that we should now adjourn during pleasure until 4.30 p.m., by which time we shall be certain to have received a message. We shall then adjourn again for only 10 minutes in order to allow an amendment to be tabled. Therefore, I beg to move that the House do now adjourn during pleasure until 4.30 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 4.1 to 4.30 p.m.]