HM Treasury

HMRC does not make a separate estimate of the amount of the impact of tax fraud within the tax gap.

HMRC defines fraud as any deliberate omission, concealment, or misinterpretation of information, or the false or deceptive presentation of information or circumstances in order to gain a tax advantage.

Tax fraud covers a wide range of illegal activity, including:

• deliberately submitting false tax returns
• falsely claiming repayments or reliefs
• hiding income, gains or wealth offshore
• smuggling taxable goods

Some of this is carried out by dishonest individuals, but organised criminals also deliberately target the tax system for financial gain.

The tax gap includes the following illustrative estimates by customer behaviour for the tax year 2020-21.

HMRC does not make a separate estimate of the amount of made of the impact of profit shifting by multinational enterprises on the tax gap.

Some forms of base erosion and profit shifting (BEPS) are included in the Corporation Tax gap where they represent tax loss that HMRC can address under UK law. The tax gap does not include BEPS arrangements that cannot be addressed under UK law.

The Corporation Tax gap is estimated to be 9.0 per cent of the overall Corporation Tax total theoretical liability in the tax year 2020-21, which equates to £5.6 billion.

Estimates of error and fraud relating to Corporation Tax research and development tax credit claims are out of the scope of HMRC’s ‘Measuring tax gaps publications’, which can be found here: https://www.gov.uk/government/statistics/measuring-tax-gaps. The tax gap estimates only cover the taxes administered by HMRC and excludes payments made by HMRC, including research and development tax credits.

Estimates of error and fraud in research and development tax credit claims are published in HMRC’s Annual Report and Accounts, which can be found here: https://www.gov.uk/government/collections/hmrcs-annual-report-and-accounts. In 2020-21, the estimated level of error and fraud in research and development tax credits claims was 3.6 per cent (£336 million) of the estimated cost of the reliefs (£9.3 billion). The estimated level of error and fraud is 5.5 per cent (£303 million) in the small and medium enterprises scheme and 0.9 per cent (£33 million) in the research and development expenditure credit scheme.

The Government has frozen the business rates multiplier for 2022-23, which will support all ratepayers and is a tax cut worth £4.6 billion to businesses over the next 5 years.

At Autumn Budget 2021, new business rates support for green technology was announced, worth around £170 million over the next five years. In addition, the Government is bringing forward the implementation of these measures by one year, starting from 1 April 2022. This will enable businesses to invest in energy efficiency and clean heat, and support the security of energy supply. Overall, this will save businesses an extra £35 million in 2022-23.

In November 2021, I laid before Parliament a review on the issue of mortgage prisoners conducted by the Financial Conduct Authority (FCA). This review found that there are 47,000 mortgage prisoners who might benefit from switching to a new mortgage deal but are considered too high risk to do so, despite being up to date with payments.

The review makes clear that the reasons mortgage prisoners are unable to switch are complex and varied, including a high proportion of interest-only mortgage borrowers with no clear repayment plan and pre-financial crisis legacy issues such as borrowers self-certifying their income on their loan applications. A comprehensive understanding of the circumstances of mortgage prisoners is therefore crucial in progressing work and the FCA’s review provides the key insight necessary to facilitate this. Following this and previous interventions to help borrowers switch, the Government is working with industry to determine if any further solutions that can be found to help mortgage prisoners.

This further work must consider the practicality of solutions and their effects on the wider mortgage market, including the resilience of firms and fairness to other borrowers. A cap on the Standard Variable Rates (SVRs) charged by inactive firms would be an unprecedented market intervention and would undermine the principle of risk-based pricing which underlies the mortgage market. It would entail risks to the financial stability of firms which would be unable to vary their rates in line with their costs of funding and would be deeply unfair to borrowers in the wider mortgage market who pay similar rates to mortgage prisoners. It is worth noting that the SVRs charged by inactive firms are in line with those paid by borrowers in the active market.

The Government continues to examine what further practical and proportionate solutions existing to help mortgage prisoners which do not pose unacceptable financial stability risks or are unfair to other borrowers in the mortgage market.

In November 2021, I laid before Parliament a review on the issue of mortgage prisoners conducted by the Financial Conduct Authority (FCA). This review found that there are 47,000 mortgage prisoners who might benefit from switching to a new mortgage deal but are considered too high risk to do so, despite being up to date with payments.

The review makes clear that the reasons mortgage prisoners are unable to switch are complex and varied, including a high proportion of interest-only mortgage borrowers with no clear repayment plan and pre-financial crisis legacy issues such as borrowers self-certifying their income on their loan applications. A comprehensive understanding of the circumstances of mortgage prisoners is therefore crucial in progressing work and the FCA’s review provides the key insight necessary to facilitate this. Following this and previous interventions to help borrowers switch, the Government is working with industry to determine if any further solutions that can be found to help mortgage prisoners.

This further work must consider the practicality of solutions and their effects on the wider mortgage market, including the resilience of firms and fairness to other borrowers. A cap on the Standard Variable Rates (SVRs) charged by inactive firms would be an unprecedented market intervention and would undermine the principle of risk-based pricing which underlies the mortgage market. It would entail risks to the financial stability of firms which would be unable to vary their rates in line with their costs of funding and would be deeply unfair to borrowers in the wider mortgage market who pay similar rates to mortgage prisoners. It is worth noting that the SVRs charged by inactive firms are in line with those paid by borrowers in the active market.

The Government continues to examine what further practical and proportionate solutions existing to help mortgage prisoners which do not pose unacceptable financial stability risks or are unfair to other borrowers in the mortgage market.

The Chancellor and I meet with the Department for Business, Energy and Industrial Strategy on a regular basis to discuss a range of issues. The Government sees co-operatives as a vital part of the UK economy, delivering services that their members and local communities need.

The Government recognises that incubators and accelerators play a crucial role in helping businesses. Local Enterprise Partnerships (LEPs) and universities can support their local area through creating an environment to encourage co-operatives and mutuals to start and grow. Through the Levelling Up White Paper, the Government expects LEPs to continue to embed a strong, independent local business voice into decision-making fora, and to develop local economic strategies based on business intelligence about their area. This could include co-operative and mutual incubators and accelerators, as appropriate to the local context. As LEPs transition to new arrangements, we want to ensure that businesses, including mutuals and cooperatives, continue to be able to access the support, insights, and representation that LEPs provide, and to ensure that an independent business and stakeholder voice continues to play its vital role supporting growth in all parts of England.

The 2022-23 Local Government Finance Settlement is un-ringfenced to ensure local authorities can prioritise funding based on their own understanding of the needs of their local communities. As democratically elected organisations, local authorities are responsible for managing their budgets and making spending decisions that reflect their priorities, which may include mutuals.

The Government is committed to increasing innovation and, in turn, jobs, growth and prosperity to all parts of the UK. The UK Innovation Strategy, published in July 2021, sets out the Government’s vision to make the UK a global hub for innovation by 2035. To support delivery on the four pillars of the Strategy, BEIS is increasing funding for core Innovate UK programmes by 66% to £1.1 billion in 2024-2025. This will further help connect UK companies, such as co-operatives and mutuals, to the capital, skills and connections needed to innovate and grow.

The Chancellor and I meet with the Department for Business, Energy and Industrial Strategy on a regular basis to discuss a range of issues. The Government sees co-operatives as a vital part of the UK economy, delivering services that their members and local communities need.

The Government recognises that incubators and accelerators play a crucial role in helping businesses. Local Enterprise Partnerships (LEPs) and universities can support their local area through creating an environment to encourage co-operatives and mutuals to start and grow. Through the Levelling Up White Paper, the Government expects LEPs to continue to embed a strong, independent local business voice into decision-making fora, and to develop local economic strategies based on business intelligence about their area. This could include co-operative and mutual incubators and accelerators, as appropriate to the local context. As LEPs transition to new arrangements, we want to ensure that businesses, including mutuals and cooperatives, continue to be able to access the support, insights, and representation that LEPs provide, and to ensure that an independent business and stakeholder voice continues to play its vital role supporting growth in all parts of England.

The 2022-23 Local Government Finance Settlement is un-ringfenced to ensure local authorities can prioritise funding based on their own understanding of the needs of their local communities. As democratically elected organisations, local authorities are responsible for managing their budgets and making spending decisions that reflect their priorities, which may include mutuals.

The Government is committed to increasing innovation and, in turn, jobs, growth and prosperity to all parts of the UK. The UK Innovation Strategy, published in July 2021, sets out the Government’s vision to make the UK a global hub for innovation by 2035. To support delivery on the four pillars of the Strategy, BEIS is increasing funding for core Innovate UK programmes by 66% to £1.1 billion in 2024-2025. This will further help connect UK companies, such as co-operatives and mutuals, to the capital, skills and connections needed to innovate and grow.

The UK is well known internationally as a hub for high quality capital markets backed by strong and effective regulation. The Treasury is committed to ensuring the proper functioning of capital markets, including working with the Financial Conduct Authority to monitor any potential risks to UK markets.

The Treasury is not aware of any concerns that Sponsor Designation of legal advice poses a risk to UK debt markets, and as such has not raised this matter with the Financial Conduct Authority or the Solicitors Regulation Authority.

The UK is well known internationally as a hub for high quality capital markets backed by strong and effective regulation. The Treasury is committed to ensuring the proper functioning of capital markets, including working with the Financial Conduct Authority to monitor any potential risks to UK markets.

The Treasury is not aware of any concerns that Sponsor Designation of legal advice poses a risk to UK debt markets, and as such has not raised this matter with the Financial Conduct Authority or the Solicitors Regulation Authority.

The Government has taken ambitious action to green the financial system. The UK was the first country in the world to commit to fully mandatory disclosures aligned with the Taskforce on Climate-Related Financial Disclosures (TCFD). These rules have now been introduced by the FCA, BEIS and DWP.

The Government is also supporting the work of the Taskforce on Nature-related Financial Disclosures (TNFD) which will provide a framework for corporates and financial institutions to report and act on nature-related risks, including deforestation. TNFD will build, consult on and test its framework, which it aims to launch in 2023. As part of its response to the Dasgupta Review, the Government committed up to £3m additional support to the development of the TNFD framework.

The Government are aware of the small market for EV conversions. Vehicles originally designed to run on electricity currently attract a nil rate of Vehicle Excise Duty (VED), but this is not necessarily the case for vehicles converted from internal combustion engine (ICE) to electric vehicle (EV). Vehicles first registered after 1 March 2001 which are converted to electric are not able to have their VED treatment changed.

The Government is strongly committed to the safety of UK road users. Therefore, in considering any changes to the VED treatment of converted vehicles, it must make sure that it does not indirectly encourage unsafe practices. The variety of conversion options, carried out with differing degrees of technical expertise, gives rise to complex safety and operational challenges.

However, as with all taxes, HMT and DfT will work closely to keep this policy under review as the market continues to develop.

Motorists should check the resultant tax liabilities of their vehicle before agreeing to undertake a conversion from ICE to EV.

The Approved Mileage Allowance Payment (AMAP) rates aim to reflect running costs including fuel, servicing and depreciation.

Most domiciliary care staff are employed by private providers who decide their mileage reimbursement rate. Employers, including those of care staff, are not required to use AMAPs. Instead, they can agree to reimburse the actual cost incurred, where individuals can provide evidence of the expenditure, without an Income Tax or National Insurance charge arising.

If an employee is paid less than the approved amount, they are entitled to claim tax relief (Mileage Allowance Relief) on the shortfall. The maximum MAR claim is set to the same level as the AMAP rates.

As with all taxes and allowances, the Government keeps AMAP rates under review and any changes are considered by the Chancellor.

The Rural Fuel Duty Relief gives support to petrol and diesel users by compensating fuel retailers in some rural areas. The criteria for the scheme are set out in a public notice that can be found at: https://www.gov.uk/guidance/rural-duty-relief-scheme-notice-2001.

At Spring Statement 2022 in response to fuel prices reaching record levels, the government announced a temporary 12-month cut to duty on petrol and diesel of 5p per litre. This is the largest cash-terms cut across all fuel duty rates at once, ever, and is only the second time in 20 years that main rates of petrol and diesel have been cut. This cut represents savings for households and businesses worth around £2.4 billion in 2022-23.

The government has no current plans to revise Rural Fuel Duty Relief, but keeps all taxes under review.

Ministerial meetings with external organisations are published as part of the Department’s transparency data. The Chancellor has not had any meetings with representatives of the National Union of Rail, Maritime and Transport Workers within the last reporting period for ministerial meetings (1 October to 31 December 2021).

At Spring Statement 2022 in response to fuel prices reaching record levels, the government announced a temporary 12-month cut to duty on petrol and diesel of 5p per litre.

This is the largest cash-terms cut across all fuel duty rates at once, ever, and is only the second time in 20 years that main rates of petrol and diesel have been cut. This cut represents savings for households and businesses worth around £2.4 billion in 2022-23.

All taxes, including fuel duty, remain under review.

Like all taxes, benefit-in-kind tax rates for company cars, also known as Company Car Tax (CCT), are kept under review. The Government aims to announce CCT rates at least two years ahead of implementation to provide certainty for employers, employees and fleet operators.

HM Treasury’s spend on consultancy is published and available for viewing within the Annual Report and Accounts. HMT is yet to lay its accounts for 2021-22, but these are due to be published prior to the summer recess. We have included the links to the published Annual Report and Accounts for each of the available years in question within the table below.

The Government is fully focused on ensuring that the private sector provides debt relief for low-income countries where this is required as part of an internationally agreed debt treatment. For example, under the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative, private sector participation on at least as favourable terms as bilateral creditors is a fundamental principle. The G20, including the UK, has repeatedly emphasised the importance of this principle.

The Government does not currently have any intention to pursue a legislative approach that would force private lenders to participate in debt relief initiatives. Any legislative approach would need to address a number of challenges. For example, legislating may increase the cost of finance for low-income countries or reduce the availability of finance to meet wider development goals.

The government understands that millions of people across the UK, of all ages, are worried about the rising cost of living.

From 1 April 2022, the National Minimum Wage for people aged 21-22 increased by 9.8% to £9.18 an hour and the Apprentice Rate increased by 11.9% to £4.81 an hour.

On 26 May 2022, the government announced over £15 billion of additional support for households, targeted particularly on those with the greatest need, bringing total government support for the cost of living to over £37 billion this year.

Young people may be able to benefit from the additional support the government is providing, including:

• £400 off household energy bills from October through an expansion of the Energy Bills Support Scheme (EBSS);

• a one-off Cost of Living Payment of £650 for households on means-tested benefits; and an additional one-off disability Cost of Living Payment of £150 for disabled people;

• an extra £500 million of local support, via the Household Support Fund, for those in need of additional support

Individuals can claim tax repayments directly from HMRC, which has introduced new digital services to make this easier. If they claim directly, as many individuals do, they get to keep the full amount of the payment they are due.

Around 500,000 individuals use third-party repayment agents annually to claim tax refunds. Many individuals value this service, understand and accept the fee structure, and are repeat users. The government recognises this and does not want to prevent individuals who want to use repayment agents from doing so.

However, the government recognises concerns that some individuals are being charged excessive fees, and that the terms and conditions under which services are provided have not been made clear.

The government launched a consultation “Raising standards in tax advice: protecting customers claiming tax repayments” on 22 June 2022, which proposes measures to protect the public from unscrupulous repayment agent practises. This consultation will close on 14 September 2022. This forms part of the government’s agenda to raise standards in the market for tax advice.

At Spring Statement 2022, the Government published analysis which illustrates the overall impact of tax, welfare and public services spending for households across the income distribution.

This analysis shows that in the year 2024-25 the poorest 60% of households will receive more in welfare and public spending than they contribute in tax.

Using ONS data from 2019-20, available at Effects of taxes and benefits on household income - Office for National Statistics (ons.gov.uk), which only considers tax and welfare, the poorest 50% of households are estimated to receive more in welfare than they contribute in tax.

Within the Economy Update on 26^th May, the Chancellor announced the Government is urgently evaluating the scale of extraordinary profits in the energy generation sector and the appropriate next steps.

As part of this process, officials are currently engaging with industry stakeholders, to gather evidence on energy generator’s level of profitability and the operation of their business models.

The PM’s ten-point plan and recent energy security strategy has set the UK on a pathway to a significant movement away from gas generation and towards renewables and low-carbon technologies.

The Government recognises that any measures, tax or otherwise, need to be proportionate and avoid creating undue distortion or impacts on UK investment.

Within the Economy Update on 26^th May, the Chancellor announced the Government is urgently evaluating the scale of extraordinary profits in the energy generation sector and the appropriate next steps.

As part of this process, officials are currently engaging with industry stakeholders, to gather evidence on energy generator’s level of profitability and the operation of their business models.

The PM’s ten-point plan and recent energy security strategy has set the UK on a pathway to a significant movement away from gas generation and towards renewables and low-carbon technologies.

The Government recognises that any measures, tax or otherwise, need to be proportionate and avoid creating undue distortion or impacts on UK investment.

Within the Economy Update on 26^th May, the Chancellor announced the Government is urgently evaluating the scale of extraordinary profits in the energy generation sector and the appropriate next steps.

As part of this process, officials are currently engaging with industry stakeholders, to gather evidence on energy generator’s level of profitability and the operation of their business models.

The PM’s ten-point plan and recent energy security strategy has set the UK on a pathway to a significant movement away from gas generation and towards renewables and low-carbon technologies.

The Government recognises that any measures, tax or otherwise, need to be proportionate and avoid creating undue distortion or impacts on UK investment.

Within the Economy Update on 26^th May, the Chancellor announced the Government is urgently evaluating the scale of extraordinary profits in the energy generation sector and the appropriate next steps.

As part of this process, officials are currently engaging with industry stakeholders, to gather evidence on energy generator’s level of profitability and the operation of their business models.

The PM’s ten-point plan and recent energy security strategy has set the UK on a pathway to a significant movement away from gas generation and towards renewables and low-carbon technologies.

The Government recognises that any measures, tax or otherwise, need to be proportionate and avoid creating undue distortion or impacts on UK investment.

Within the Economy Update on 26^th May, the Chancellor announced the Government is urgently evaluating the scale of extraordinary profits in the energy generation sector and the appropriate next steps.

As part of this process, officials are currently engaging with industry stakeholders, to gather evidence on energy generator’s level of profitability and the operation of their business models.

The PM’s ten-point plan and recent energy security strategy has set the UK on a pathway to a significant movement away from gas generation and towards renewables and low-carbon technologies.

The Government recognises that any measures, tax or otherwise, need to be proportionate and avoid creating undue distortion or impacts on UK investment.

In January 2021, the government legislated to bring all pre-paid funeral plan providers and intermediaries within the regulatory remit of the Financial Conduct Authority (FCA). This will ensure that, for the first time, consumers are protected by compulsory and robust regulation.

Safe Hands Plans went into administration in March 2022. The government understands that this will be concerning for customers of Safe Hands and continues to monitor the implementation of regulation in this sector closely.

Dignity’s recent commitment to provide ongoing support to Safe Hands’ customers until November 2022 is welcome. This will ensure that any planholders who pass away during this time will receive a funeral without any additional charge.

The administration process for Safe Hands is an ongoing legal process under the general control of court. This process may provide further information about what has happened at the firm, and the government awaits the outcome with interest.

The methodology for calculating payments to Equitable Life policyholders was published in 2011 and can be found at: www.gov.uk/government/publications/equitable-life-payment-scheme-design.

At 31 May 2022, the total value of payments made by the Equitable Life Payment Scheme was £1,305,099,430.44

The Financial Conduct Authority (FCA) is operationally independent from the Government. Questions about the FCA’s day to day decision making, including details about staffing, budget and spending are matters for the independent FCA.

These questions have therefore been passed to the FCA who will respond directly to the honourable member by letter. A copy of the letter will be placed in the Library of the House.

The Financial Conduct Authority (FCA) is operationally independent from the Government. Questions about the FCA’s day to day decision making, including details about staffing, budget and spending are matters for the independent FCA.

These questions have therefore been passed to the FCA who will respond directly to the honourable member by letter. A copy of the letter will be placed in the Library of the House.

The government recognises that while the transition towards digital payments brings many opportunities cash remains an important part of daily life for millions of people across the UK, including those who may be in vulnerable groups or elderly. The government remains closely engaged with the financial regulators, including through the Treasury-chaired Joint Authorities Cash Strategy Group, to monitor trends relating to the use of cash by people and businesses.

In the Queen’s Speech in May 2022 the government announced that it will introduce legislation to protect access to cash as part of the Financial Services and Markets Bill. The government intends to establish the FCA as the lead regulator for access to cash with responsibility to ensure that people can continue to access cash withdrawal and deposit facilities. Through this legislation the government intends to ensure that people can continue to use cash in their day-to-day lives. The Bill will be brought forward when Parliamentary time allows.

The Government is strongly committed to tackle financial exclusion and discrimination and aims for everyone, whatever their background or income, to be able to access useful and affordable financial products and services. The Government works closely together with regulators, the financial services industry and other stakeholders, to ensure that all consumers of financial services are appropriately protected.

Industry-agreed principles, rather than government policy, determine what and how information is shared between organisations and Credit Reference Agencies (CRAs). CRAs then hold this information on individuals’ credit files and use it to create a credit score.

Consumers can add a Notice (of up to 200 words) to their credit file explaining any circumstances, such as being a victim of financial abuse, that may impact decisions made about their applications for credit, including mortgages. Lenders should take the content of this Notice into account alongside the other information on the credit file. In addition, the Financial Conduct Authority (FCA) is currently undertaking a Credit Information Market Study which is assessing how the sector is working now and how it may develop in the future. The FCA will publish an interim report in summer 2022.

The FCA is also currently developing a new Consumer Duty, which would require firms to place more emphasis on the needs of all customers, including those who are vulnerable or at risk of being financially excluded. The FCA is required to publish its final rules before the end of July.

Prior to this, in February 2021, the FCA also published its finalised guidance for firms on the fair treatment of vulnerable customers, setting out a number of best practices (https://www.fca.org.uk/publications/finalised-guidance/guidance-firms-fair-treatment-vulnerable-customers).

This applies to all firms where the FCA Principles for Business apply, regardless of sector and in respect of the supply of products or services to retail customers.

The Financial Ombudsman Service (FOS) is an independent non-governmental body. The Treasury is not involved in the day-to-day operations of the FOS and the remit of the FOS is set out by the Financial Conduct Authority. The rules on how the FOS should handle complaints state that ‘The ombudsman will attempt to resolve complaints at the earliest possible stage. Inevitably some cases will be more complex than others and therefore take more time to resolve, however the FOS should deal with all cases in a timely manner.

Nevertheless, the Government agrees that it is vitally important that the FOS should be accountable for its performance and the quality of its work. The FOS answers to a board of directors, appointed by the Financial Conduct Authority, and must make a report each year on the discharge of its functions which is required to be laid before Parliament. This ensures Parliament is able to scrutinise the efficiency, effectiveness and economy with which the FOS carries out its functions. There are also regular meetings between Treasury officials and the FOS where relevant emerging issues are discussed.

The Government recognises the importance of transparency of fees and charges in ensuring effective competition between payment service providers.

Where currency conversion is provided as part of a payment transaction, the Payment Services Regulations 2017 make requirements on UK payment service providers regarding disclosure of fees and charges to the payer, for example, the exchange rate used for a currency conversion transaction. Provisions under the Cross Border Payments Regulation, which continue to apply in the UK as part of retained EU law, also contribute to price transparency, with further requirements regarding how foreign exchange costs must be communicated before a payment is made. The Financial Conduct Authority (FCA) is the relevant regulatory authority with responsibility for monitoring and enforcing these requirements, and should the FCA have concerns regarding firms’ compliance with the requirements on fee advertisement, it will take appropriate action as necessary

These regulations, among other things, are intended to enable payment service users such as consumers and SMEs to make informed decisions when making use of payment services, including where currency conversion is offered as part of a payment transaction. The Government has no plans at this time to amend the requirements on firms, but keeps all policy under review.

The Government recognises the importance of transparency of fees and charges in ensuring effective competition between payment service providers.

Where currency conversion is provided as part of a payment transaction, the Payment Services Regulations 2017 make requirements on UK payment service providers regarding disclosure of fees and charges to the payer, for example, the exchange rate used for a currency conversion transaction. Provisions under the Cross Border Payments Regulation, which continue to apply in the UK as part of retained EU law, also contribute to price transparency, with further requirements regarding how foreign exchange costs must be communicated before a payment is made. The Financial Conduct Authority (FCA) is the relevant regulatory authority with responsibility for monitoring and enforcing these requirements, and should the FCA have concerns regarding firms’ compliance with the requirements on fee advertisement, it will take appropriate action as necessary

These regulations, among other things, are intended to enable payment service users such as consumers and SMEs to make informed decisions when making use of payment services, including where currency conversion is offered as part of a payment transaction. The Government has no plans at this time to amend the requirements on firms, but keeps all policy under review.

The Government recognises the actions of the financial services industry to help tackle APP fraud, including the creation of the Contingent Reimbursement Model Code. The Contingent Reimbursement Model (CRM) is a voluntary code which sets out reimbursement standards for signatory Payment Service Providers (PSPs).

With nine of the UK’s largest banks signatory to the Code, the CRM has had some beneficial impacts since its introduction in May 2019. However, while improving matters, the Code comes with limitations, including disparity in how different payment service providers are interpreting their obligations under it, as well as its lack of comprehensive cover across providers.

The Government therefore welcomed the PSR’s recent consultation on APP scams, which set out various potential measures that could improve scam prevention and outcomes, including proposals to introduce mandatory requirements to reimburse victims. The Government has confirmed it intends to legislate to address any barriers regarding regulatory action on mandatory reimbursement when parliamentary time allows, as part of the Financial Services & Markets Bill. Treasury Officials also undertake regular engagement with financial services firms, the Lending Standards Board (who oversee the CRM Code) and other stakeholders, to understand what further action can be taken to protect consumers from APP fraud.

The Government recognises the actions of the financial services industry to help tackle APP fraud, including the creation of the Contingent Reimbursement Model Code. The Contingent Reimbursement Model (CRM) is a voluntary code which sets out reimbursement standards for signatory Payment Service Providers (PSPs).

With nine of the UK’s largest banks signatory to the Code, the CRM has had some beneficial impacts since its introduction in May 2019. However, while improving matters, the Code comes with limitations, including disparity in how different payment service providers are interpreting their obligations under it, as well as its lack of comprehensive cover across providers.

The Government therefore welcomed the PSR’s recent consultation on APP scams, which set out various potential measures that could improve scam prevention and outcomes, including proposals to introduce mandatory requirements to reimburse victims. The Government has confirmed it intends to legislate to address any barriers regarding regulatory action on mandatory reimbursement when parliamentary time allows, as part of the Financial Services & Markets Bill. Treasury Officials also undertake regular engagement with financial services firms, the Lending Standards Board (who oversee the CRM Code) and other stakeholders, to understand what further action can be taken to protect consumers from APP fraud.

The Managed Service Companies (MSC) legislation, introduced in 2007, prevents the large-scale promotion of structures where workers work through companies that serve no commercial purpose beyond trying to achieve a tax saving.

The MSC rules require there to be an MSC provider, who is the promoter of these arrangements. It is not the case, however, that all clients of an MSC provider will necessarily be an MSC. HMRC guidance in the Employment Status Manual at ESM3510 sets out the criteria.

If a person disagrees with a tax decision made by HMRC, they have the right to appeal, request a review, or notify the appeal to the tax tribunal.

HMRC, will seek, wherever possible, to handle disputes by working collaboratively with customers. In any dispute, HMRC will seek to establish and understand the relevant evidence and facts as quickly and efficiently as possible.

Under the UK-EU Trade and Co-operation Agreement (TCA), both the UK and the EU agreed to remove tariffs in relation to the goods originating in the UK/EU. This means that goods exported to the EU from GB that meet the preferential rules of origin in the TCA do not incur customs duty.

HMG has and continues to provide extensive support to GB business.

As the customs authority, HMRC works alongside Border Force to ensure that border processes are as smooth as possible, whilst targeting cross-border threats. HMRC uses a risk based and intelligence-led response focusing compliance interventions on tackling the goods and traders that represent highest risks to revenue, the UK economy and wider society, and our international reputation.

HMRC has provided support on GOV.UK to help importers understand the import procedures they need to follow and the duty they need to pay (including on goods from China).