It is a pleasure to be here to discuss issues that we have already discussed once or twice this year already. The Government’s new clauses have rightly been introduced to tackle loss buying and capital allowance avoidance planning. Those are examples of what we can, following the logic of the hon. Member for Walthamstow (Stella Creasy), call hard-core tax abuse. The rules have been allowed to get out of date and have been exploited for years, so it is right that they are tackled.
The new clauses demonstrate, however, that the system is far too complex. There are far too many different types of loss and of relief, which create the scope for transactions to try to exploit them. I am not entirely sure why we need trading losses, schedule A losses, D3 losses, non-trade debits and capital losses—and probably a few more I cannot remember off the top of my head. If we moved to a simpler corporation tax system that had only revenue losses and capital losses, we could perhaps tackle avoidance more easily, rather than having to introduce separate anti-avoidance rules for each different kind of loss to try and ensure that they all work. I encourage the Minister for the umpteenth time to try to simplify our corporation tax system, because it would help in tackling these problems.
There is an interesting question on the interaction of legislation with the general anti-abuse rule—if each time we see some aggressive abuse that we think the general anti-abuse rule should stop, we end up producing a specific anti-abuse rule, what does that say about how strong we believe the general anti-abuse rule is? I would personally prefer specific, clear legislation that all taxpayers can read, understand and abide by, rather than relying on some general statement of principle, but there has to come a point when we say, “We think that is abusive and falls foul of the general anti-abuse rule, and that is
enough for us to tackle it. We do not need to introduce some more complexity to our tax code: instead, we will rely on the rule.” It will be interesting to see, as the years pass, how confident the Government are in that position. For us to be able to evaluate how successful the general anti-abuse rule is, we will probably need to see if the Treasury—or, at least, HMRC—can win some court cases relying on that rule. It may be a few years before we have some returns filed and challenged on that basis.