PARLIAMENTARY DEBATE
Treasury - 25 January 2022 (Commons/Written Corrections)

Legal interpretation tax losses arise when businesses take a different view from HMRC of how the law should be applied, resulting in a different tax outcome. This issue has proven stubborn and difficult to tackle. Disputes often arise late in the day and are not identified in time for formal compliance enquiries to be undertaken, resulting in irrecoverable losses to the Exchequer. The new notification requirement will tackle the legal interpretation tax gap in a well-targeted and proportionate way, raising £150 million over the next five years, while driving positive behavioural change.

[Official Report, Finance (No. 2) Public Bill Committee, 11 January 2022, Vol. 706, c. 106.]

Letter of correction from the Financial Secretary to the Treasury:

An error has been identified in my statement.

The correct information should have been:

Legal interpretation tax losses arise when businesses take a different view from HMRC of how the law should be applied, resulting in a different tax outcome. This issue has proven stubborn and difficult to tackle. Disputes often arise late in the day and are not identified in time for formal compliance enquiries to be undertaken, resulting in irrecoverable losses to the Exchequer. The new notification requirement will tackle the legal interpretation tax gap in a well-targeted and proportionate way, raising £130 million over the next five years, while driving positive behavioural change.

Rebated Fuel Rules: Construction Industry

The following is an extract from the Westminster Hall debate on Rebated Fuel Rules: Construction Industry on 19 January 2022.

Despite diesel being one of the most polluting fuels that vehicles and machinery can use, red diesel benefits from a significant duty discount—a duty rate of around 11p compared with almost 68p per litre on standard diesel. That really is significant. As a consequence, businesses using red diesel pay far less for the harmful emissions they produce than individual car owners. The tax changes that we are introducing in April mean most current users of red diesel in the UK will instead be required to use diesel taxed at the standard fuel duty rate like motorists, which more fairly reflects the harmful impact of the emissions that are produced.

[Official Report, 19 January 2022, Vol. 707, c. 165WH.]

Letter of correction from the Exchequer Secretary to the Treasury:

An error has been identified in the response I gave to the debate on Rebated Fuel Rules: Construction Industry.

The correct statement should have been:

Despite diesel being one of the most polluting fuels that vehicles and machinery can use, red diesel benefits from a significant duty discount—a duty rate of around 11p compared with almost 60p per litre on standard diesel. That really is significant. As a consequence, businesses using red diesel pay far less for the harmful emissions they produce than individual car owners. The tax changes that we are introducing in April mean most current users of red diesel in the UK will instead be required to use diesel taxed at the standard fuel duty rate like motorists, which more fairly reflects the harmful impact of the emissions that are produced.