§ John BarrettTo ask the Chancellor of the Exchequer, pursuant to the answer of 17 July 2002,Official Report, column 336W, on pharmaceutical companies, what steps he is taking to ensure such tax incentives are not exploited by UK-based pharmaceutical companies, for the clearance of expired or nearly expired medicines to developing countries. [72432]
§ Dawn PrimaroloDonors will be encouraged to comply with the World Health Organisation's Guidelines for Drug Donations. Reference will be made to them in the guidance that the Inland Revenue issues to its inspectors which is published on the Inland Revenue website and is widely used by taxpayers and businesses in determining their tax liability.
Where a company makes a gift from its trading stock it would normally be required to bring the market value of the gift into its tax computation in order to reflect the sales proceeds foregone. The relief in Clause 55 of the Finance Bill 2002 works by removing this charge, subject to certain conditions. If stock is unsaleable because it is time expired or nearly so, there would be little or no tax charge to add back—therefore the tax relief would be of little or no value to the donor company.