§ Mr. RobathanTo ask the Chancellor of the Exchequer what assessment he has made of the impact of the abolition of foreign earnings deduction announced in the Budget on(a) companies employing British subjects overseas and (b) the competitiveness of British consultants working overseas. [40484]
§ Dawn PrimaroloIn reaching the decision to end the general foreign earnings deduction, full consideration was given to all likely practical consequences. It would, however, be wholly misleading to look at one aspect of tax in isolation. The Government believe the best way to support business is by generating a stable economic environment and through broadly based relief.
§ Sir Alastair GoodladTo ask the Chancellor of the Exchequer what estimate he has made of the cost to UK aid agencies of the proposed changes to the foreign earnings deduction regulations announced in the Budget. [40918]
§ Dawn PrimaroloBased on information provided by the agencies, any such cost will be very low. There are a number of measures built into the tax system which are designed to provide support for charities. Foreign earnings deduction (FED) was not one of these. The majority of aid agency employees abroad will not be UK resident for tax purposes and so will be unaffected by the FED changes.
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§ Sir Alastair GoodladTo ask the Chancellor of the Exchequer what assessment he has made of the foreign earnings deduction regulations announced in the Budget on the UK staff of overseas aid agencies who are employed on contracts overseas. [40917]
§ Dawn PrimaroloMost aid agency employees working abroad will not be UK resident for tax purposes and so will be unaffected by the FED changes. The small number of aid agency employees affected by the FED changes will be left in a position similar to that of other UK resident charity employees, and new relief will be available to them for travel and accommodation.