Finance Bill 2002
New Clause 21
Mr Paul Boateng (Lab, Brent South)
To move the following clause:-
(1) This section amends-
(a) section 200 of the Taxes Act 1988 (which treats allowances paid to a Member of Parliament in respect of, among other things, expenses of visiting the national parliament of another member State as not being income for tax purposes), and
(b) section 200ZA of that Act (which makes corresponding provision in relation to members of the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly).
(2) In subsection (3)(b) of Section 200, and in paragraph (b) of the definition of ?EU travel expenses? in subsection (3) of section 200ZA, after ?of another member State? insert ?or of a candidate country?.
(3) After subsection (3) of each section insert-
?(4) In subsection (3) above ?candidate country? means Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, the Slovak Republic, Slovenia or Turkey.
(5) The Treasury shall by order made by statutory instrument make such amendments to the definition in subsection (4) above as are necessary to secure that the countries listed are those that are from time to time candidates for membership of the European Union?.
(4) This section applies in relation to sums paid on or after 1st April 2002.
EXPLANATORY NOTE
SUMMARY
1. When Members of Parliament visit the national parliament of another European Union member state there is no income tax charge on the payments they receive to cover travelling and related expenses. In May this year the House extended the scheme under which such payments are made to cover visits to the national parliament of a candidate country. The purpose of this new clause is to ensure that no income tax charge arises on such payments either. It also extends the equivalent rule for corresponding payments to Members of the Scottish Parliament and the devolved assemblies for Wales and Northern Ireland.
2. The Clause applies to payments made on or after 1 April 2002.
DETAILS OF THE CLAUSE
3. Sub-section (1) provides for the amendment of Section 200 of the Income and Corporation Taxes Act 1988 which deals with expenses payments to Members of Parliament, and Section 200ZA which deals with corresponding payment to members of the Scottish Parliament and the devolved assemblies for Wales and Northern Ireland.
4. Sub-section (2) amends sub-section 3(b) of Section 200 and paragraph (b) of the definition of ?EU travel expenses? in sub-section 3 of Section 200ZA by adding after ?the national parliament of another member State?, the words ?or of a candidate country?.
5. Sub-section (3) adds two new subsections to each section ?
- subsection (4) lists the countries that are candidate countries in subsection (3)
- subsection (5) provides for the Treasury to make regulations to amend the list of candidate countries in subsection (4).
6. Subsection (4) provides that the clause has effect in relation to payments made on or after 1 April 2002.
BACKGROUND
7. Section 200 of the Income and Corporation Taxes Act 1988 removes any income tax charge on payments Members of Parliament receive for travelling and related expenses when they visit European Community institutions in Brussels, Luxembourg or Strasbourg, or the national parliament of another member State.
8. Section 200ZA removes any income tax charge on corresponding payments to members of the Scottish Parliament and the devolved assemblies for Wales and Northern Ireland.
9. The House decided in May 2002 to extend the scheme for Members of Parliament to meet the cost of visiting the national parliament of a country that is a candidate for membership of the European Union.
10. The amendment to Section 200 ICTA extends the exemption to cover the wider scope of payments under the terms of the House of Commons resolution.
11. The amendment to Section 200ZA ICTA applies the same treatment to corresponding payments to members of the Scottish Parliament and the devolved assemblies for Wales and Northern Ireland.