Stephen Doughty the Labour MP for Cardiff South and Penarth has implied that a tax scheme originally introduced in 2005 by Labour Chancellor Gordon Brown is being improperly used to dodge tax.
Doughty wrote to the Chancellor of the Exchequer how many people using the “Business Premises Renovation Allowance Scheme” have also been subject to investigation by HM Revenue and Customs for what he called “tax avoidance or tax evasion”.
In his written question Doughty also asked how much tax relief had been granted under the Business Premises Renovation Allowance Scheme in each of the last six years and when it’s planned to close the scheme.
Replying, the Treasury Minister David Gauke told Doughty that HM Revenue and Customs (HMRC) doesn’t collate this information “at the aggregate level requested”. He said that Business Premises Renovation Allowance (BPRA) “is an incentive designed to bring the derelict or unused business properties back into use, by providing 100 percent relief for renovation of vacant properties in disadvantaged areas”.
David Gauke’s written response said that “In 2012 HMRC noticed a spike in the cost of BPRA. Investigations revealed that this increase was due to marketed avoidance. HMRC challenges avoidance wherever they see it. Where taxpayers choose to press their case to litigation, HMRC wins around 80% of cases heard in court. In addition, legislation was introduced in Finance Act 2014 to prevent future avoidance.The NAO [ National Audit Office] complimented the speed with which HMRC addressed this avoidance and tightened the legislation.”
Gauke concluded by saying that “The costs of BPRA are published annually in HMRC’s Estimated cost of minor tax allowances and structural reliefs ” and said it had been announced in 2011 that Business Premises Renovation Allowance would be “extended to 31 March 2017 for Corporation Tax and 5 April 2017 for Income Tax”.
Neither party mentioned that the Business Premises Renovation Allowance Scheme was originally introduced by Labour Chancellor Gordon Brown in the 2005 Finance Act.