Secretariats website
Last updated: 08 July 2009
19.1 Treasury Ministers should be consulted on all tax and excise duty proposals at the earliest possible stage, including anything that may be considered an environmental tax. This will help to ensure that all tax matters are resolved before a Bill is ready for introduction and will minimise delays.
19.2 Careful thought should be given to potential tax implications of the creation of new activities or bodies which may require either exemption or bringing into the tax net, and of changes to legislation which is itself referred to in tax law. The control of betting and gaming duties, road fuel duties and environmental taxes, among other things, are the responsibility of HM Revenue and Customs. Departments should consider whether social, transport or environmental legislation could affect any of these areas.
19.3 Where departments consider that the Bill may impact on any of these areas it is essential to obtain the agreement of the relevant Treasury Minster to the tax or duty proposals. This process is quite separate from approval of the Bill by Legislation and policy Committees and consent should be obtained before the Bill is submitted for collective agreement.
19.4 Departments should notify HMRC at the start of the Bill process. Officials will then assist the Bill team to determine the tax or duty provisions which may be required and provide advice to the relevant Treasury Minister in line with the Government's tax and environmental policies. Arrangements for consulting with the devolved administrations on tax provisions in Bills should also be agreed with HMRC.
19.5 Treasury agreement must also be obtained to any proposals in the Bill which have implications for public expenditure or public sector manpower.
19.6 Any proposals in a Bill which create a charge upon public funds must be authorised by a Money Resolution, and those which impose charges of certain kinds upon the people or make certain provisions about borrowing or the use of receipts must be authorised by a Ways and Means Resolution. The motion for the resolution must be initialled by a Treasury Minister. It is important that official level discussions with the Treasury begin at an early stage so that Ministerial agreement to the proposal can be obtained in time for the Bill's introduction to Parliament. The Chief Secretary to the Treasury is a member of Legislation Committee and must also give their approval before the Bill can be introduced into Parliament.
Powers to incur expenditure (the “Second Reading Convention”)
19.7 Departments should not normally consume resources or incur expenditure on new services until the relevant legislation has Royal Assent and the department has obtained Parliamentary authority through the Supply Estimates process. However, where expenditure has to be incurred urgently, it may be possible once the legislation has passed Second Reading in the House of Commons. Departments wishing to make appointments to new public sector bodies being set up under specific legislation should wait until the legislation has received Royal Assent, although “shadow” bodies may be established to prepare the ground. In exceptional circumstances, and with the approval of the Treasury, appointments may be made after Second Reading in the Commons (see paragraph 2.4.3 of Managing Public Money) [External PDF].
19.8 If the passage of the Bill is delayed, or the Bill is introduced in the Lords and does not reach the Commons until later than it would otherwise have done, departments must ensure that they continue to observe the guidance in Managing Public Money on powers to incur expenditure on new or substantially amended services. Delay in implementation may sometimes mean that the expenditure profile has to be revised in order for that expenditure to remain consistent with the general regularity and propriety principles of public expenditure.