§ Mr. BurnsTo ask the Chancellor of the Exchequer what changes he proposes to the regulations used in determining the provisions allowable for tax purposes against sovereign debts held by banks.
§ Mr. DorrellThe original regulation made in December 1990 which set out the rules to be used in arriving at the maximum tax deduction available for doubtful sovereign debt follow broadly the existing Bank of England guidelines, commonly known as the Bank of England matrix. The Bank intends to make certain improvements to the matrix to make it simpler and easier to operate; these changes are to have effect for periods ending on or after 30 June 1993. We have decided that similar changes should be made to the regulations used for tax purposes.
The Inland Revenue is today making available in draft form the amending regulations. I am placing a copy in the 755W House of Commons Library. Further copies are available on request from the Inland Revenue, to which representations on the draft regulations should be sent by 8 April 1993.
The amending regulations are subject to the affirmative resolution procedure and will be brought before the House in the usual way in due course.