Mark Garnier MP: speeches

Speeches

• 3 Feb 2026 · Finance (No. 2) Bill (Sixth sitting) · Hansard source

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  Welcome to your position, Mrs Harris. I hope you will indulge me a little if I go back into some of the history of this place. I have been here for 15 years, which I think is greater than the collective experience of most members of this Committee, although that is not something to brag about. However, we sometimes forget the lessons from history. Back in 2011 and 2012, when I was a newly elected MP, we started looking at the retail distribution review. The Financial Conduct Authority felt strongly that people needed better advice from their wealth managers, and the retail distribution review was brought in to do a number of different things. One of the things the review did was require wealth managers to have proper qualifications, which is not an unreasonable proposition. Slightly more controversially, it also resulted in wealth managers potentially having unlimited liability, to the end of their life, if they messed up, which was a bit of a problem. A third measure was about the compensation of wealth managers. At the time, wealth managers were paid a commission by the providers of the products they sold. That was changed to a fee-based system, where somebody seeking the services of a wealth manager would not potentially be ripped off as a result of commissions being paid, and we would therefore have a level playing field.

• 3 Feb 2026 · Finance (No. 2) Bill (Sixth sitting) · Hansard source

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  I wholeheartedly agree. The more we discuss it in public, the more the general public will realise that avoiding tax is a very bad thing. Anything that highlights that point is to be welcomed, so I strongly urge the Government to do the right thing so that we can make this prohibition work and protect advisers who may simply have made an error. Clause 159 lays out the civil penalties, including a financial penalty of up to £1 million if the prohibition is breached. Additionally, it sets out an individual fine of £5,000 that can be issued for each person who has participated in the arrangements. We agree with the Government’s aim of creating a deterrent, but given how steep the sanctions are, there is a concern that the 30-day window for making representations is not enough of a safeguard. At the moment, that is the only recourse: a person cannot make a formal appeal to the tax tribunal. Subsequent clauses, which the Committee will discuss later, include a “reasonable excuse” defence. Not having such a defence leaves open the possibility that the bad behaviour of one rogue actor will lead to the prosecution of the wider organisation. Will the Minister and her officials agree to take those points away and consider tabling a new clause on Report?

• 3 Feb 2026 · Finance (No. 2) Bill (Sixth sitting) · Hansard source

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  Clauses 206 to 212 introduce measures to address the involvement of some legal professionals in tax avoidance schemes, and I reassure the Minister that we support what the clauses look to achieve. Clause 206 allows lawyers to make a formal declaration of material protected by legal professional privilege that may support HMRC’s investigations. That means that the vast majority of lawyers will be able to flag concerns and demonstrate compliance with HMRC without breaking that privilege. At the same time, clause 207 introduces a penalty of £10,000 for a lawyer who makes a deliberately false declaration in an effort to cover their involvement in the promotion or marketing of tax avoidance, although I cannot imagine a situation where a lawyer would do anything that was not 100% honest. The clauses work well together, and there is widespread agreement from those in industry about the positivity of the changes. We certainly agree with industry that these are good measures. Question put and agreed to. Clause 206 accordingly ordered to stand part of the Bill. Clauses 207 to 212 ordered to stand part of the Bill. Clause 213 Penalties for non-disclosure of tax avoidance schemes Question proposed, That the clause stand part of the Bill.

• 3 Feb 2026 · Finance (No. 2) Bill (Sixth sitting) · Hansard source

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  The clauses focus on compliance notices and ineligibility orders. Again, we support the thrust of the clauses, but the Institute of Chartered Accountants in England and Wales has asked for further clarity in some areas. First, clause 230(3) makes provisions for an adviser to be notified of a compliance notice. However, it does not impose a time limit and could lead to delays. Given tax advisers and relevant individuals are being subject to strict timeframes, with some exceptions or extensions, should HMRC not have to abide by similar rules and timeframes? Secondly, clauses 233 and 234 are specifically on ineligibility orders being issued to tax advisers and relevant individuals. Those are important as they will help to temporarily or permanently remove an entity from being officially registered. However, given the gravitas of the orders, clarity is needed to ensure they are issued in a reasonable manner. There should also be a mechanism for an ineligibility order to be cancelled if an appeal or a review finds in favour of the tax adviser. Finally, we agree with the ICAEW. The suspension or ineligibility orders should only apply once an order is final. I am sure the Minister would agree that it would be unfair on a business to notify clients of an order to only then have it withdrawn. The orders are serious sanctions, so the initial reputational damage could genuinely put a tax adviser out of business even if they have not done anything wrong. I would be grateful for the Minister’s reassurance that that is something they will reasonably consider.

• 3 Feb 2026 · Finance (No. 2) Bill (Sixth sitting) · Hansard source

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  Clause 241 and schedule 20 provide more details about the review and appeals process that HMRC will operate. They also confirm that HMRC must offer a review where there is an opportunity for a person to appeal a decision. The clarity is welcome, but there are still some issues that the Government need to consider further. First, paragraph 6 of the schedule provides that a statutory review automatically concludes in HMRC’s favour if it simply does not deal with the review request. As the Chartered Institute of Taxation puts it, that “seems particularly inappropriate here, given an appeal is one of the few ways that a firm can challenge this regulatory decision (in which HMRC has a conflict of interest).” We agree that it is unfair for HMRC to find in its own favour because it failed to carry out something in a timely manner. With that in mind, will the Minister commit to taking this away, and potentially removing paragraph 6(7)? The other issue comes back to the temporary relief from suspension, as previously discussed. Under schedule 20, the decision to grant temporary relief rests with an individual authorised HMRC officer, who can be the same officer who issued the suspension. It goes further: the schedule stipulates that the officer must take into account the prospect of the review or appeal succeeding. Could that not create conflicts of interest and be fundamentally unfair to the applicant? Would it be better practice to mandate that either another authorised officer or the commissioners make the decision to grant temporary relief from the suspension? I would be grateful if the Minister could provide some clarity.

• 3 Feb 2026 · Finance (No. 2) Bill (Sixth sitting) · Hansard source

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  The Minister is being very indulgent. The Liberal Democrats and I are probably as one on this point. The reason it is incredibly important that we get this right, and the reason I brought up the retail distribution review, is that there can be unintended consequences. We should remind ourselves that the Bill is 539 pages long. The tax code is 21,000 pages long—10 million words. More importantly, the tax code costs us £15.3 billion a year to comply with—it is really complicated. We already have a very complicated system, and if we do anything that inadvertently makes it more complicated—if we get this wrong—it will be really bad news for the whole of our economy. We must not do something that inadvertently—I was going to say, screws it up—

• 3 Feb 2026 · Finance (No. 2) Bill (Sixth sitting) · Hansard source

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  As with earlier clauses, we agree with these measures, which will help to streamline the process and allow HMRC to quickly cancel benefits such as gross payment status where there is deliberate non-compliance or fraud. That will allow the authorities to stay ahead of bad actors and ultimately protect taxpayers’ money. We broadly welcome the thrust of these measures. I have one or two questions. There is a lack of clarity that needs addressing, and I would welcome the Minister’s comments on it. The clauses allow HMRC to remove gross payment status from parties that “knew or should have known” of inaccuracies with the CIS that were being carried out by another party. In the same vein as my earlier comments on the terminology “likely to be” marketed, the words “should have known” extend the liability beyond deliberate fraud. We recognise that, in this instance, the terminology follows European Court of Justice and High Court judgments that established the Kittel principle, which means that a business that “should have known” is aiding the perpetrators of fraud and is effectively an accomplice. However, there is no concrete definition of this term, and by extension there is a lack of clarity for innocent parties that make genuine errors. Getting this wrong could result in significant cash-flow issues, contract terminations and reputational damage for subcontractors, so we need to be sure the provision is airtight. Will the Minister commit to looking at this point again and providing the clarity that industry is asking for? If not, it would be useful to understand how HMRC proposes to ensure that mistakes are not made in decision making and whether it intends to publish any corresponding guidance for businesses and interested parties.

• 29 Jan 2026 · Finance (No. 2) Bill (Fourth sitting) · Hansard source

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  Clause 109 shifts the responsibility for the remaining two inland border facilities from the Government to the port authorities. The switching of inland border facilities services and operations to a commercial basis was something that the last Government were exploring. However, we query whether clause 109 goes a little too far. It would require the ports to prepare to take on the additional responsibility of providing equivalent infrastructure. We appreciate why the ports received the additional Government assistance in the first place, especially considering the far-reaching effects that any disruption in Dover could have. However, while I agree that the ports must be able to stand on their own feet, clause 109 risks the ports’ introducing additional import and export charges being applied to every lorry and trailer that passes through. The magnitude of the price increases could be substantial for businesses, which may end up passing on the additional costs to consumers—not to mention that they would be in addition to the port inventory charges that the port of Dover implemented from 1 January this year. I recommend that the Government assess the impact that the legislative changes in clause 109 would have on these ports, the businesses and hauliers that rely on them and consumers, who will have to pay a higher price. We get the principle of the clause, but we are concerned about whether there are any adverse knock-on effects on trade through the ports.

• 29 Jan 2026 · Finance (No. 2) Bill (Fourth sitting) · Hansard source

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  The ATED was originally brought in back in 2013 under the coalition Government to discourage the use of corporate structures to hold high-value residential properties. Reliefs were built into the system to ensure that genuine commercial property businesses were not caught by the charge. However, those reliefs were subject to a clear 12-month time limit for making a claim. That was for two reasons: first, it helps ensure that relief claims are made while the facts are still reasonably clear. Secondly, it simply aligns with normal tax time limits. Now the Government want to remove that time limit entirely. Without a deadline, if claims are made over the original 12-month period, HMRC could be required to revisit historical ATED returns long after they were filed. Given service levels in HMRC are already stretched, it is unclear why the Government have chosen to do that. It could increase, rather than reduce, administrative burdens on HMRC. Have the Government assessed the resource implications for HMRC of processing claims made more than a year after the relevant adjustment period?

• 29 Jan 2026 · Finance (No. 2) Bill (Fourth sitting) · Hansard source

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  Clause 107 gives the Secretary of State the power to direct the Trade Remedies Authority to initiate a dumping or subsidisation investigation. We support measures that tackle any unfair trading practices, including dumping and subsidisation. We are also supportive of measures that bring power back into the hands of Secretaries of State and Ministers. That is especially important when it comes to practices that could harm our industries and our constituents. One example of that is the steel industry. Back in 2016, it was reported that Tata Steel had suffered more than 1,000 job losses, including 750 from Port Talbot alone. Tata stated that the reason for this was the flooding of cheap imports, particularly from China. This will continue to be a problem. According to the OECD, Chinese steel imports surged to a record level of 118 million tonnes in 2024. Interestingly, there are different points of view on this. For those in the building industry, the idea of having an awful lot of cheap steel coming into the country is not that unattractive, but it would affect our domestic industries. How the Government curb dumping and subsidisation must be accompanied by, at least in part, a deterrent effect. That is crucial for investigations that implicate large and powerful countries. Clause 107 removes the opportunity to implement any deterrent effect because it caps duties imposed on the dumping margin or subsidy amount, not at the injury margin. I acknowledge that this is in line with World Trade Organisation rules. However, injury margins can often exceed dumping and subsidy margins due to their accurate reflection of the true economic harm inflicted on UK industries. Each time, they have been overridden due to the lesser duty rules, and the removal of this rule could have given the Government the opportunity to apply a regime that reflects injury margins better in dumping and subsidy investigations. That would not only protect UK industries but send a clear message to those who engage in these abhorrent trade practices that this will not be tolerated and will be met with serious repercussions. I would be grateful if the Minister could expand on the Government’s rationale not to cut duties at the injury margin. It is quite a technical question, and if he feels the urge to write back, that might save him the trouble of getting into a lot of technical detail. We are supportive of the thrust of amendments 44 and 45, tabled by the hon. Member for Maidenhead. It is important for decision makers to be accountable to Parliament for their decisions, whether that is the Secretary of State or the Trade Remedies Authority. I suspect that these amendments will be voted down, so could the Minister help the Committee understand what safeguards are in place to address the concerns outlined by the hon. Member for Maidenhead? Clause 108 gives the Secretary of State the power to direct the Trade Remedies Authority to initiate a safeguarding investigation. It is important that the UK has the necessary defensive measures where there is injury to UK industries. However, clause 108 requires clarity on the conditions that enable the Secretary of State to direct the Trade Remedies Authority to initiate an investigation. I have two points on this. First, on the requirement of evidence of increased quantities in a good, clause 108 does not introduce any parameters or a threshold that would distinguish a legitimate increase in quantity of goods from an increase that warrants investigation. Secondly, there is no definition or guidance on what constitutes “serious injury”; the clause does not make clear what serious injury means. Without the clarification, the clause grants the Secretary of State substantial discretion in determining whether those conditions have been met. Fundamentally, though, on both these clauses, we must ensure that these important decisions are made with technical rigour and on the evidence. It is incredibly important that they are not driven solely by political whim. I ask the Minister for an assurance on that point.

• 29 Jan 2026 · Finance (No. 2) Bill (Fourth sitting) · Hansard source

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  The Minister talks about value for money and the cost, but the alternative is that there will be no listings, so it does not cost anything because this is revenue that the Government would not otherwise have. If they levy this stamp duty, people will not list—they will go to other markets. If they remove it, people will list. There is not actually any change in the revenue to the Government. I do not understand why they cannot extend it. It is not lost revenue because it never would have been generated in the first place.

• 29 Jan 2026 · Finance (No. 2) Bill (Fourth sitting) · Hansard source

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  Before I go into the details of the clause, and before the Committee discusses the subsequent two clauses, it is worth getting on record how much the Opposition object to trade wars and increasing tariffs. Such tariffs harm the country that introduces them. Take what has been going on in America as an example. On its “liberation day”—as I think its Government called it—it introduced very heavy tariffs, including on something as simple as the iPhone, which the American people would consider to be one of the greatest inventions and greatest products they have ever had. It seemed that the person who introduced those tariffs had completely failed to observe that 95% of an iPhone is made in Vietnam and China, as a result of which the tariffs increased the price of iPhones for the American people, which was completely against the intentions of that Government. Tariffs are really bad, and we have been trying to get them down for an awfully long time. However, I completely understand the point that the Government are trying to make with the Trade Remedies Authority and the toolkit that the Government need in order to respond to certain issues. It is vital that we have the ability to move on things such as tariffs, and I suspect that the Minister is 100% aligned with me on this, but I stress that we have lessons from history, from when such actions have gone hideously wrong. The Smoot-Hawley Tariff Act of 1930, introduced by President Hoover, was designed by Senator Smoot and Representative Hawley to try to help American businesses and American farmers by increasing tariffs. The net result was a global trade war that resulted in a 65% drop in global trade. That is what happens when people muck around with tariffs; that is where the damage can come. I completely appreciate that these measures are, I suspect, a very necessary response to what is happening on the other side of the Atlantic, where there is a very unpredictable trade policy, so it is the right thing to do. However, I urge the Minister to talk to all his colleagues about this matter, and to reassure the Committee that these measures are not about having our own version of that policy, and about increasing tariffs in order to have a trade war, but about having a set of relevant measures that mean that the Government can act in defence to what could be a hostile attack on trade.

• 29 Jan 2026 · Finance (No. 2) Bill (Fourth sitting) · Hansard source

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  It is great to hear the Minister talking about making the City of London a pre-eminent place in which to grow and list companies, and this is a very welcome measure. However, if he accepts that stamp duty is what has been holding back the listing of shares, why do the Government not go the whole hog and get rid of stamp duty altogether, thereby making the City of London comparable with pretty much every other major developed stock market in the world?

• 29 Jan 2026 · Finance (No. 2) Bill (Fourth sitting) · Hansard source

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  My hon. Friend is making an incredibly good point about the inflationary effect of these taxes. He has mentioned houses, and we know that the Bank of England is charged with using monetary policy to keep inflation under control. The direct effect of this measure could be an increase in interest rates, and therefore an increase in the cost of mortgages. Does he think that the Government would be happy with that?

• 29 Jan 2026 · Finance (No. 2) Bill (Fourth sitting) · Hansard source

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  The previous Conservative Government introduced the levy back in 2022 as a proactive measure to combat money laundering and strengthen our economy. As my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), now the shadow Business Secretary, said when he brought it in, “the levy will provide an important private sector contribution from those industries at highest risk of being abused for money laundering.” We support robust action against money laundering, but we have one or two concerns about the scale. The introduction of a new band C, with a £500,000 levy for businesses with a revenue of between £500 million and £1 billion, is a substantial new burden on businesses that are already heavily regulated and are already investing significant sums in anti-money laundering compliance. To be clear, a business with £500 million to £1 billion revenue used to pay £36,000 and will now have to pay half a million—a 1,289% increase. The Government’s own impact assessment suggests that between 100 and 110 businesses will be affected by the levy rise in this band C. It is a really big rise, so it would be helpful if the Minister could justify the nearly 1,300% rise for firms moving into the new band C. Perhaps he could also say whether he has had any representations from any businesses about the effect it could have on investment, staffing level, productivity and all the rest of it. The simultaneous reduction in the threshold for the “very large” band, band D, means that more businesses fall into the higher levy. Will the Minister talk about the rationale for that? Has he considered the potential impact on the UK’s competitiveness, particularly mid-sized firms that may now face substantially higher costs?

• 29 Jan 2026 · Women’s State Pension Age Communication: PHSO Report · Hansard source

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  I thank the Secretary of State for advance sight of his statement. As constituency MPs, we will all have met many campaigners from the Women Against State Pension Inequality campaign group—the WASPI women. I am sure that many Members will have received a large amount of correspondence on this matter recently. If they are anything like me—I have had 150 emails recently about it—they will really feel the strength of opinion out there. It is safe to say that both our constituents and us as Members of Parliament have been left wanting by this Government. In December 2024, the previous Secretary of State, the right hon. Member for Leicester West (Liz Kendall), told this House that the Government would not compensate these women. Let me remind colleagues what her rationale was. She said that “the Government do not believe that paying a flat rate to all women, at a cost of up to £10.5 billion, would be a fair or proportionate use of taxpayers’ money” —[ Official Report , 17 December 2024; Vol. 759, c. 168.] She also tried to argue that they could not afford it because of holes in the Government finances. However, as my hon. Friend the shadow Secretary of State for Work and Pensions rightly said: “Government compensation should always be based on what is fair and just.” —[ Official Report , 17 December 2024; Vol. 759, c. 170.] Before getting into government, it seems that Labour MPs did think that an injustice had been done. Let us remind our colleagues of what members of this Government have said in the past. The Prime Minister himself called this situation “a huge injustice”. The Deputy Prime Minister and Justice Secretary slammed the “cliff edge” that he said faced WASPI women. The Foreign Secretary said that she was “fighting for a fair deal for the WASPI women.” The Chancellor of the Exchequer claimed to “want justice for WASPI women”. Even the current Secretary of State for Work and Pensions got in on the action, putting out a social media post with the caption: “MPs campaigning for a better deal for WASPI women.” It is therefore no wonder that the WASPI women, who were promised so much, are so angry; the people who used to stand beside them have now turned against them. If the Government really believed that these women had faced a great injustice, they would have found a way to compensate them. They could have avoided a deal with Mauritius that will cost us all £35 billion, but they chose not to. They could have found savings on our country’s benefits bill, but they chose not to. They had 14 years to prepare for government and are messing up by doing nothing. That brings us to the statement from the Secretary of State today. Is it not convenient that he should choose a sitting day when most MPs are not here? It is almost as if he does not want to hear the criticism from his own Back Benchers. In reality, all that the Secretary of State is doing is announcing that nothing has changed and that the Government will not be compensating WASPI women. I have a few questions. Given that the Secretary of State previously campaigned for a better deal for WASPI women, does he think that today’s announcement provides that better deal? In his statement, he tried to argue that this issue is somehow the Conservatives’ fault. However, he forgets that the maladministration that the previous Secretary of State apologised for was committed under the last Labour Government, before 2010—the ombudsman’s report made that explicit. Can the Secretary of State hold up his hands and take accountability for those mistakes? This is a really interesting point. The Secretary of State chose to mention the triple lock in his statement and to say that the state pension will go up by up to £575 this year, with incomes expected to rise by up to £2,100 a year by the end of this Parliament. We all know that there is no cap on the triple lock. [ Interruption. ] There is no cap on it, but he made the point that that would rise by “up to” £2,100 a year. Is he implying that the triple lock is about to be capped? Will he confirm that he is apparently U-turning on the Government’s policy on the triple lock by imposing a cap? Is it not just a fact that, frankly, this Government resemble a bunch of joyriders pulling handbrake turns in a Tesco car park, when Labour should be a serious party of government? Their Back Benchers keep being marched up the hill, only to be told to march down again. The Government even take the Whip away from them for having a conscience, only to tell them later that Ministers are proud to support policies for which support was only recently a sackable offence. Does the Secretary of State really think that this constant back and forth is fair on WASPI women? I look forward to his comments.

• 28 Jan 2026 · Firearms Licence Holders: Mandatory Medical Markers · Hansard source

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  I am grateful to my hon. Friend for making those really important points. I am the chairman of the British Shooting Sports Council, which brings together 15 leading shooting sports organisations, and an enthusiastic shooter, and I wholeheartedly agree with him. I have yet to find anybody who disagrees with the points that he is making. My hon. Friend made a point about the wider licensing regime. This issue is partly about the licensing regime for firearms, but there is an interesting carry-over. I also have a pilot’s licence, and the pilot’s licensing regime—particularly the commercial pilot’s licensing regime—takes into account medical fitness to fly, which includes mental health. There are examples out there of how this can be done if we get the licensing regime right and get the buy-in of GPs.

• 27 Jan 2026 · Finance (No. 2) Bill (Second sitting) · Hansard source

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  On clause 36, we support tougher measures to tackle tax avoidance and close the tax gap. Under the previous Government, the tax gap of the total theoretical tax liabilities fell from 7.5% in 2005-06 to 5.3% in 2023-24. But it is crucial that legislation is not so broad to the extent that people entering into arrangements for legitimate commercial reasons face the brunt of HMRC’s enforcement powers. The scale of genuine tax avoidance as a proportion of the total tax gap is important to note. According to HMRC, in 2023-24, avoidance behaviour as a share of the tax gap was just 1%. It was also 1% in the 2022-23 tax year and was 2% in 2021-22, 2020-21 and in 2019-20. Avoidance ranked lowest among the behaviours that contributed to the tax gap. Contrast that with 31% due to failure to take reasonable care, 15% due to error and 12% due to legal interpretation. What those behaviours have in common is they involve genuine mistakes being made, so pursuing the route set out in clauses 36 and 37 risks hurting those who enter arrangements for solely commercial purposes who may have simply made honest mistakes. With regard to clause 37, we support tougher measures to tackle tax avoidance to close the tax gap. The methods of deferring tax for general company reconstructions and share exchanges are identical to each other’s and to that for collective investment schemes. The key difference between clauses 36 and 37 is the business practice to which the anti-avoidance measures apply when arrangements are made to avoid tax liability. Clause 36 applies to CISs, and clause 37 applies to share exchanges and company reconstructions, so the argument pertaining to the general principle and practicality of the Government’s new anti-avoidance measures also applies to those clauses. With regard to clause 38, we support tougher measures to tackle tax avoidance to close the tax gap. The clause seeks to change the no gain/no loss rules if HMRC suspects that a transfer of business has taken place to secure a tax advantage. Those rules have been instrumental in the process of transferring a business. They are especially useful for arrangements between complex structures. No gain/no loss rules can ensure fluidity throughout the transfer process, and they stave off cash-flow issues during the process itself. While we support tackling tax avoidance, we must also recognise the role that no gain/no loss rules play during delicate business practice. We understand that there are already safeguards in place from HMRC, such as the general anti-abuse rule. Nevertheless, we must also ensure that no business that utilises no gain/no loss for legitimate commercial purposes is penalised or hung out to dry through denied relief claims.

• 27 Jan 2026 · Finance (No. 2) Bill (Second sitting) · Hansard source

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  Clause 35 introduces a 50% chargeable gain on shares sold by a company to an EOT. That will have a direct effect on trustees’ ability to benefit company employees. The 2014 Conservative Government introduced 100% capital gains tax relief to incentivise companies to transition to EOT models. EOTs have benefited employees by rewarding and motivating them—for example, by distributing annual tax-free bonuses of up to £3,600 a year to each employee. These tax changes would hurt employees most of all. The Office for Budget Responsibility’s “Economic and fiscal outlook” from November 2025 forecasted that this will raise just £900 million a year on average from 2027 to 2028. However, the OBR also gave this measure a “very high” uncertainty ranking. The OBR highlighted the fact that these tax changes could have a behavioural effect: company owners would instead hold on to their shares for longer before realising gains. That means that company owners will slow the flow of shares they sell to trustees, so trustees will receive far fewer shares and, as a result, less value will be passed on to employees. It is worth mentioning the commentary from other organisations. The Financial Times reported that tax advisers have warned against this measure and are concerned that entrepreneurs would have to cover the tax bill before they receive the proceeds of the sale. Chris Etherington of RSM UK is concerned that these changes will slow the pace of change to EOTs. The Centre for the Analysis of Taxation stated that this was a “good reform” and supports withdrawing relief entirely. This is not very popular, and there is a high uncertainty of it even raising any revenue.

• 27 Jan 2026 · Finance (No. 2) Bill (Second sitting) · Hansard source

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  Clause 40 tackles the use by UK non-residents of protected cell companies to avoid paying non-resident capital gains tax. We agree that corporate structures should not be exploited to shelter people from paying their fair share of tax. However, we must consider the practicalities of how an audit of one cell may affect other cells and the PCC itself. PCCs have their benefits. For example, the ringfencing of assets and liabilities can ensure that any issue with one cell does not spread to others. In that sense, PCCs can be more robust and durable. Audits, of course, are absolutely necessary to ensure compliance and legality. However, they can also prove costly and stressful for a company owner who is simultaneously running a business. Cells do not have full autonomy; much of that resides in the core of the PCC. Different cells may behave differently from each other or have differing risk appetites—therein lies the risk. A situation where one cell is investigated by HMRC, and the audit process proves frustrating because that cell’s conduct is aggressive or inappropriate, risks tarnishing the entire PCC in the assumption that the other cells behave similarly. Subsequent audits could then become more aggressive and difficult. As I said, we support measures that tackle any exploitation of the corporate structure to avoid paying tax. The Government must ensure that the implementation of clause 40 protects innocent parties that may be affected. Clause 41 focuses on non-UK residents, individuals and companies in collective investment vehicles who sell UK land or property connected to CIVs under double taxation treaties. Under the clause, non-UK residents in CIVs will no longer be required to register for corporation tax or claim capital gains tax relief if the double taxation treaties fully cover the gains they have made. The Government’s rationale for that is to streamline paperwork and reduce redundant filing—hurrah! I cannot begin to explain my happiness about trying to reduce red tape. It is fantastic to get rid of it where we can. Our tax code is 22,000 pages long and has 10 million words. Anything that makes that easier is hugely welcome.

• 27 Jan 2026 · Finance (No. 2) Bill (Second sitting) · Hansard source

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  Clause 39 requires taxpayers to claim incorporation relief or pay CGT up front. It is key that sole traders and other eligible people understand the changes the clause makes. What concerns us is whether enough awareness has been made to affected people, and that is crucial as claiming incorporation relief has always been a passive process because it happens automatically. Soon, people who have been accustomed to this passiveness must acutely manage their relief claims. We do not want anybody who has been conducting legitimate business to suddenly be hit with an unexpected tax bill. Landlords, for example, are a common entity who claim incorporation relief. They do so by transferring their rental property portfolio into a limited company. Should a landlord undertake that process and then find themselves receiving an unexpected tax bill, that could add significant pressure on their investments, which in this case involve houses occupied by tenants. It is not clear how awareness will be raised so that those eligible for relief do not pay such a tax bill. While I know HMRC has outlined the proposal and will provide guidance, there is no mass communication or awareness campaign. That means that any information campaign that does eventually happen may be too late.

• 27 Jan 2026 · FTSE 100 Index · Hansard source

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  The Chancellor has been very proud that the FTSE 100 has passed through the 10,000-point barrier, citing that as an endorsement of her policies. Does she not realise that that still leaves FTSE 100 on lower valuations than comparable markets and that, in any event, over 80% of the earnings of the FTSE 100 are generated outside the UK? Is it not clear that the FTSE 100 performance is despite this Government’s policies, not because of them?

• 27 Jan 2026 · Energy Bills · Hansard source

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  We have already heard this morning that businesses are suffering harm from business rates and national insurance contributions going up, but on top of that, according to the Office for National Statistics, the energy bills of non-energy intensive industries such as hospitality and retail have increased under this Government by up to 10% in the last year. The Conservative are proposing our cheap power plan, which would save small businesses up to £5,000 a year on their energy bills. What is the Minister doing to help small businesses with their energy bills?

• 27 Jan 2026 · Finance (No. 2) Bill (First sitting) · Hansard source

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  Clause 20 will introduce specific exemptions for minor expenses incurred by an employee on behalf of their employer. The Opposition particularly welcome subsections (3) to (6). As the Institute of Chartered Accountants in England and Wales says, it is a positive step that focuses on prevention rather than cures. It is also about the trade-off between tax relief and reduced future healthcare spending. As the Association of Taxation Technicians has asked, will the Minister consider whether the covid-19 vaccination could be included in this provision? The Government’s explanatory notes state that corresponding changes to NICs for influenza vaccines and homeworking equipment will be made through separate regulations. Will the Minister provide more detail on when we can expect those regulations to be introduced? On clause 21, the Government’s policy paper suggests that there will be no direct impact on business. However, there may be an indirect impact, as employers feel pressured to change their policies on reimbursement. As the Chartered Institute of Taxation points out: “This creates an uneven situation in which two employees with identical working arrangements and costs are treated differently for tax purposes solely on the basis of their employer’s reimbursement policy.” It also seems to follow our party’s scepticism about solely remote working. During the passage of the Employment Rights Act 2025, the Government said repeatedly that the right to work from home boosts productivity. Clause 21 seems to go against that by making it more difficult to work from home. It also seems to be a further attack on private sector employees, despite the fact that in 2024 HMRC spent £82 million on remote working devices for its workers, while the Home Office spent £53 million. Is this another example of the Government hitting the private sector while protecting the public sector? Clauses 22 and 23 confirm that payments received in Great Britain for cancelled, moved or curtailed shifts are subject to income tax. In the explanatory notes, the Government state that this would also allow for “the introduction of regulations to ensure that payments are also subject to National Insurance contributions”. We think it would help to provide fairness in the tax system to support the clarity that the clause provides, so can the Minister confirm when the Government will seek to introduce those specific changes? More generally, I want to make a point that my hon. Friend the Member for Mid Buckinghamshire (Greg Smith) made on the Employment Rights Bill Committee. While the clause provides fairness in the system between employees, the Government are still providing little support for businesses if they have to cancel, move or curtail shifts in circumstances that are unexpected or out of their control. Will the Minister commit to working with her colleagues in the Department for Business and Trade to assess how they can better support businesses when such situations arise?

• 27 Jan 2026 · Finance (No. 2) Bill (First sitting) · Hansard source

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  It is of course standard practice—as with income tax—for the Government to legislate the charge for corporation tax every year. These rate levels have remained unchanged since Labour came into office. As my hon. Friend the Member for Grantham and Bourne (Gareth Davies) pointed out last year, Labour promised to cap the corporation tax rate at 25% for the whole of this Parliament. That has not been done in legislation, although we have had an indication from the Minister that that is still the Government’s intention. I will make just one small political point. The Government did promise that they would not increase taxes on working people, but we have seen national insurance contributions increase—that was obviously in a different Bill. None the less, the more the Minister can say about capping corporation tax at 25%, the more confident businesses and our economy will be that something will not be slipped in during the next three and a half years before the general election. We have no other objection to this measure.