, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
Shall we see what committee determines in terms of a recommendation in that respect, and we'll give some further thought to how the legislation could be reviewed? My initial thought with what you described is that the legislation might be used several times…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
And we have had committee legislation in the last Senedd as well, so—.
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
So, committees can, at any point, decide to undertake a review of legislation or a part of legislation in order to try and make a case to the Government for change, and we would always engage with that kind of work.
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
No, I agree that we should be reviewing legislation. I think, with this piece of legislation, a review after the legislation has been used a number of times, or different parts of the legislation or those four purpose tests have been used at different times…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
You're writing me off, Mike. [Laughter.]
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
I think it would be possible, but is it desirable, and what would the real purpose be?
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
We would reject it on the basis of just the practicalities of it. So, if a sunset clause of five years was placed on the Bill, that after any points—. So, regulations that had been made under that would then fall away. I'll ask Lynsey, perhaps, to reflect on…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
It wasn't something that we'd proposed initially, and it's something that has come through consultation. I'm very attracted to it, but I do think we need to think it through fully, which we haven't done yet. But I do see a very strong argument for it and it's…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
I see the statement as a policy statement on how Welsh Government Ministers would use the power to make retrospective regulations. I think that it's intended, really, to give security to the public and the Senedd that the power to make regulations with…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
Generally, I wouldn't consider that any of the narrow four purpose tests should be excluded from the made affirmative procedure, and that's because those four purpose tests have been specifically designed to capture scenarios where we might need to respond at…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
I'll ask Lynsey to come in on this.
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
We're really fortunate in the sense that we've got an excellent range of stakeholders with whom we engage very frequently on tax matters and take their opinions, information and advice. That's been really helpful in the development of the proposals in front…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
It was about conferring a benefit on taxpayers and wanting to do so at the earliest point, rather than having to wait for the whole process to end. I think taxpayers would welcome having that benefit at the earliest possible opportunity. Likewise, we would…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
It's a very regal ringtone.
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
I think that we're creating a tool that is potentially necessary, and I think that if you were a taxpayer who was having, retrospectively, a benefit conferred on you, you would absolutely welcome that. [Interruption.]
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
I think Sir Paul is referring particularly to secondary tax legislation that is retrospective. Beyond that, I think that there are numerous examples of retrospective secondary legislation in Westminster, and I don't know if officials just want to give one or…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
Well, I've been clear so far that I would usually expect retrospection to be limited to cases where the impact would be to confer benefit on Welsh taxpayers. So, for example, if we wanted Welsh taxpayers to benefit from a reduction to their tax liability from…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
I think this would depend in large part on the decision that was taken in the first place in respect of the tax, but the important point is that, if the Senedd then decided not to approve the regulations, the taxpayer is fully protected as a result. But to…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
Well, I think there are already some really strong safeguards in place in the Bill. You see that the Bill already provides that penalties can't be imposed with retrospective effect, and then we have section 5 in the Bill, which seeks to protect taxpayers. So…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
I would just say that we take tax avoidance very seriously and there is the possibility of circumstances changing in the future and things might arise that might require us to respond quickly. And this Bill would offer us the opportunity to do that. So…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
I think the provision is deliberately broad to capture all eventualities, because we can't predict at this point the future scenarios where the provision might be used, but perhaps I'll ask Lynsey to reflect on this some more as well.
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
I think it was to capture those people, such as the example I set out, where a group of taxpayers are caught up in being required to pay a tax and it's outside of what we intended in the first place, so it's an unintended consequence. So, it would be…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
I'll ask Lynsey to come in on this point. But I would just start off by saying that it's not uncommon for the law to be changed in response to the decision of a court. Although Ministers would be able to make regulations in response to a court decision…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
This is important because I think that the Bill does give sufficient restraint on the use of power whilst also allowing some flexibility. So, the Bill does say that Welsh Ministers must consider the regulations are necessary or appropriate before they can be…
, Finance Committee
Welsh Tax Acts etc. (Power to Modify) Bill: Evidence session 6
We could have introduced this Act in that period, but we've grown a lot in the last few years in respect of our experience of Welsh taxes, which has led us to this point, to want to have the additional tools, so that we're able to respond to external events…
