Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how much revenue has been refunded to oil and gas operators in the UK sector of the North Sea through decommissioning tax reliefs under the (1) Petroleum Revenue Tax, (2) Ring Fence Corporation Tax, and (3) Supplementary Charge, in each of the past five years.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Estimates of the cost of decommissioning tax reliefs used by oil and gas companies under the Ring Fence Corporation Tax (RFCT) and Petroleum Revenue Tax (PRT) regimes, are published at tax relief statistics gov.uk [1] This indicates that tax relief for decommissioning expenditure under the Petroleum Revenue Tax regime amounted to £140m in 2019-20, £270m in 2020-21, £350m in 2021-22, £340m in 2022-23, £600m* in 2023-24 and £450m* in 2024-25. Tax relief for the same expenditure under the offshore Corporation Tax regime amounted to £590m in 2019-20, £450m in 2020-21, £560m in 2021-22, £790m in 2022-23, £940m* in 2023-24 and £1bn* in 2024-25. Figures indicated by an asterisk are based on forecasted data.
[ 1] https://www.gov.uk/government/collections/tax-relief-statistics
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what is the projected total cost to the Exchequer of tax reliefs available for the decommissioning of North Sea oil and gas infrastructure over the next decade; and how much has been claimed in tax reliefs for this purpose since 2010.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Companies operating oil and gas fields in the UK and on the UK Continental Shelf (UKCS) are required to decommission infrastructure at the end of a field’s life. Tax relief is a normal part of the corporate tax system where there are genuine costs to companies, and so providing tax relief on decommissioning recognises the heavy “end of life” cost for oil and gas projects.
Estimates of the projected total cost of decommissioning relief are published on gov.uk [1]. This indicates a provision of £5.7 billion based on estimated tax repayments of Petroleum Revenue Tax (£2.1 billion) and offshore Corporation Tax (£3.6 billion) by HMRC to companies over the period to 2067 due to losses from decommissioning expenditure. Additionally, the government forecasts a cost of £5.1 billion in the form of foregone offshore Corporation Tax due to decommissioning expenditure being deductible for tax purposes in this regime.
Estimates of the cost of decommissioning tax relief are published at tax relief statistics gov.uk [2] . The latest structural tax relief publication indicates that tax relief for decommissioning expenditure under the Petroleum Revenue Tax regime amounted to £140m in 2019-20, £270m in 2020-21, £350m in 2021-22, £340m in 2022-23, £600m* in 2023-24 and £450m* in 2024-25. Tax relief for the same expenditure under the offshore Corporation Tax regime amounted to £590m in 2019-20, £450m in 2020-21, £560m in 2021-22, £790m in 2022-23, £940m* in 2023-24 and £1bn* in 2024-25. Figures indicated by an asterisk are based on forecasted data.
Where data is available earlier publications set out the cost of tax reliefs for earlier periods. This shows that tax relief for decommissioning expenditure under the Petroleum Revenue Tax amounted to £250m in 2014-15, £420m in 2015-16, £310m in 2016-17, £220m in 2017-18 and £170m in 2018-19. Tax relief for the same expenditure under the offshore Corporation Tax regime amounted to £850m in 2014-15, £540m in 2015-16, £480m in 2016-17, £520m in 2017-18 and £580m in 2018-19.
[1] https://assets.publishing.service.gov.uk/media/66a8ebc349b9c0597fdb0784/HMRC_annual_report_and_accounts_2023_to_2024.pdf for HMRC’s provision related to future decommissioning tax relief payments, and https://www.gov.uk/government/statistics/government-revenues-from-uk-oil-and-gas-production--2/government-revenues-from-oil-and-gas-production-september-2024#exchequer-liability-from-decommissioning for foregone revenue estimates due to the tax deductibility of decommissioning expenditure
[2] https://www.gov.uk/government/collections/tax-relief-statics for the past 5 years and earlier statistics are also available on gov.uk ([ARCHIVED CONTENT] Structural tax reliefs - GOV.UK).
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to HMRC Government Major Projects Portfolio Data March 2024, published on 16 January, how they have revised their estimated monetised benefits for the Making Tax Digital programme from £2.1 billion to £6.3 billion in the most recent Annual Report; and what methodology changes were applied to account for this increase.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Making Tax Digital (MTD) is key to tackling parts of the tax gap that result from error and failure to take reasonable care, and it is helping taxpayers reduce common mistakes in their tax returns. The benefits increase is mainly due to new and improved data.
In particular, the model was updated to better account for projected increases in customer income which increased the expected number of individuals within the scope of MTD for Income Tax. It also reflects HMRC’s increased estimate of the proportion of the Self Assessment tax gap attributable to error and failure to take reasonable care which were included in the ‘Measuring tax gaps 2023 edition’ publication. Updates also incorporated findings from a published evaluation study on the impact of MTD on VAT.
Estimates will continue to be updated as new information and insight becomes available.
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how many non-resident trusts there are with at least one UK-resident beneficiary; and how they arrived at an estimate in respect of trusts that are not required to be registered under the Trust Registration Service.
Answered by Baroness Penn
For trusts registered on the Trust Registration Service by 31 March 2023, that remained open as of 31 August 2023, there are around 3,000 non-UK resident trusts that have at least 1 UK resident beneficiary recorded.
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how many applications for trust information from the Trust Registration Service have been (1) successful, (2) refused because the trust is exempt, (3) refused because the gateway test is not met, (4) refused because individuals are exempt, and (5) refused for other reasons, in each year the TRS has been in operation, broken down by gateway such as a legitimate interest or offshore company.
Answered by Baroness Penn
Since the process for applying for information on the Trust Registration Service (TRS) came into force on 1 September 2022, c20 valid trust data requests have been processed. To date, no requests have been successful.
Of the c5 legitimate interest requests processed, fewer than five of the trusts were found on the TRS and fewer than five requests were refused because the requestor did not meet the legitimate interest test criteria. Of the c15 offshore company requests processed, fewer than five of the trusts were found on the TRS.
Fewer than five requests have been refused because information on individual beneficial owners was exempt from disclosure.
The numbers above have been rounded to the nearest five as disclosing the exact numbers would potentially disclose information held by HMRC in relation to identifiable persons. References to ‘fewer than five’ are inclusive of nil.
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how many trusts are registered with the Trusts Registration Service that hold UK land or property either directly or indirectly; and what is the total value of UK land and property assets held.
Answered by Baroness Penn
I can only provide a partial answer to this question, as the Trust Registration Service does not record information on indirect holdings of land by trustees.
Since May 2021 when the Trust Registration Service was expanded to accept registrations from non-taxable trusts, c.44,000 trusts have notified the Trust Registration Service that the trustees have acquired a direct interest in UK land on or after 6 October 2020. Of this figure, c.43,000 are UK-resident trusts and c.1,000 are non-UK resident trusts.
Only taxable trusts, including those that registered before May 2021, are required to provide a statement of assets at the time of registration, including UK land or property. However, analysing this information to arrive at a total number and value of properties held by these trusts would carry a disproportionate cost.