§ Mr. Cockeramasked the Chancellor of the Exchequer what consideration he has given to the future of the tax reserve certificate scheme, particularly in view of the unification of personal taxation.
§ Mr. Patrick JenkinMy right hon. Friend has concluded after a detailed review of the tax reserve certificate scheme that, whatever may have been its virtues when introduced, the disadvantages now outweigh the benefits. It is expensive in manpower and it represents an expensive form of borrowing for the Government. The use of the company certificates has declined markedly in recent years, and it is apparent that the scope for the use of personal certificates will be reduced under the new unified tax system. For these reasons my right hon. Friend believes that the scheme is now inappropriate and has accordingly decided that it should be withdrawn. However, he proposes to make special arrangements for personal certificates, designed to cover the years when individuals will need to provide for overlapping
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§ Mr. HigginsThe table below compares our present duty and tax-free allowances with those prescribed by the present directive for travellers within the European Economic Community. I am aware that changes in the Community's allowances are being proposed, but I see no reason to change our allowances at present. Such matters would be for discussion at the appropriate time. No reliable estimate can be given for the cost of any changes in the allowances.
surtax liabilities arising from the introduction of the unified tax system.
The present prospectus for personal certificates will be withdrawn after 31st December, 1971; but a new prospectus will then be introduced under which a final issue of certificates will be available from 3rd January, 1972 to 29th June, 1973. These will earn interest, subject to the usual conditions, up to 1st January, 1974 and will be accepted in payment of capital gains tax, surtax and income tax including the new higher rate tax and the investment surcharge but excluding tax under Schedule C and E. The present certificates will be similarly acceptable.
The sale of company certificates will cease after 31st December, 1971. Certificates purchased on or before that date will continue to be accepted in payment of corporation tax and will earn interest in accordance with the terms set out in the prospectus.
When the scheme has been wound up there will be a manpower saving of about 70 full-time and 50 part-time staff in the Inland Revenue as well as a staff saving in the Bank of England.