HC Deb 23 October 1975 vol 898 cc233-5W
Mr. Bean

asked the Chancellor of the Exchequer why the Inland Revenue is

(2) what has been the total personal disposable income for each quarter since January 1970; and what has been the percentage increase in real personal disposable income per head of the population between each of these successive quarters.

Mr. Denzil Davies

The following table shows the figures requested:

asking subcontractors to supply photographs when applying for subcontractor's tax certificates; and if he will make a statement.

Mr. Joel Burnett

There appears to have been some misunderstanding about the Inland Revenue's request for subcontractors to supply photographs when they apply for sub-contractors' tax certificates, and I am glad to have the opportunity to explain why these photographs are required.

As the House is well aware, there has been widespread concern about the extent of tax evasion in the construction Indus try by certain self-employed subcontractors—mostly those commonly called the "lump". The previous Government took the first step towards stopping this evasion by introducing in 1972 a special tax deduction scheme for the industry. Under that scheme, a contractor has to deduct tax from any payment he makes to a self-employed subcontractor, unless the subcontractor holds a Revenue certificate. The intention was, of course, that certificates would be held only by responsible subcontractors who could be relied upon to pay their tax at the end of the year.

Experience has shown certain weaknesses in the original scheme. In particular it has proved to be very easy to forge or alter the certificate, and since it does not contain adequate identifying information, very often a contractor cannot tell whether a certificate presented to him is genuine and relates to the individual presenting it. As a result, the deduction scheme is not achieving its purpose; there is a heavy loss of tax by the use of certificates—some forged, some stolen—by dishonest subcontractors, who subsequently disappear. Apart from the loss of tax itself, this is a situation which encourages organised criminal activity.

The certificate is, therefore, being completely redesigned so that it cannot easily be used by anybody but its proper owner. Obviously the best way to enable the contractor to check that a certificate has been presented by the right person is by having a photograph on it, as is done for many security and privilege passes. The photograph will thus serve as a protection both for the authorised holder of the certificate and for the contractors who have to inspect it.

I would like to emphasise that this purpose of identification is the sole reason for the photograph. Applicants for certificates are asked to supply two copies, one for use in preparing the certificate, the other for comparison. The photograph will remain the property of the Inland Revenue and is not, and will not be, available for inspection by anyone else or for any other purpose than tax.