§ Mr. Trotterasked the Chancellor of the Exchequer whether all subcontractors, other than limited companies, are required personally to present their exemption card in order to obtain payment from a contractor without deduction of tax; and whether he is satisfied that this is practicable for partnerships and others with substantial business in different areas of the country.
§ Mr. Robert SheldonUnder existing regulations a subcontractor is required to produce his certificate to a contractor before he may receive payments without deduction of tax, but he is not obliged to do this personally.
The regulations are being revised as part of the overhaul of the subcontractor's tax deduction scheme. The Government's present proposal is that the obligation on the subcontractor will remain substantially unaltered. It is proposed, however, that there be an obligation on the contractor to satisfy himself that the subcontractor is the authorised holder of a certificate, and there will, accordingly, be many occasions when the contractor will require the subcontractor to produce his certificate personally. I am satisfied that these arrangements will achieve the Government's object of dealing with tax evasion in the industry and, at the same time, will generally be practicable for subcontractors. However, representations have been received that subcontractors with large numbers of contracts could face practical difficulties; and these representations are under discussion between the industry and the Inland Revenue.