Asked by: Lord Ashcroft (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what they consider to be the difference between tax avoidance and aggressive tax avoidance.
Answered by Lord Deighton
Her Majesty’s Revenue and Customs (HMRC) distinguish between tax avoidance and tax planning. Tax avoidance is bending the rules of the tax system to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no purpose other than to produce a tax advantage. It involves operating within the letter – but not the spirit – of the law. Tax avoidance is not the same as tax planning. Tax planning involves using tax reliefs for the purpose for which they were intended. For example, claiming tax relief on capital investment, saving in a tax-exempt ISA or saving for retirement by making contributions to a pension scheme are all legitimate forms of tax planning. While such actions may reduce the total amount of tax paid, they are not tax avoidance, because they involve using tax reliefs in the way that Parliament intended when it passed the relevant legislation.
Asked by: Lord Ashcroft (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government, further to the Written Answer by Lord Deighton on 15 December 2014 (HL3255), why the repayment conditions were not agreed in advance of the European Commission announcing the additional contribution to the European Union Budget; and what contingency planning they had undertaken to prepare for such an additional repayment demand.
Answered by Lord Deighton
In line with the Own Resources system – which underpins Member State contributions to the EU budget – adjustments are made to Member State contributions towards the end of each year, as a result of statistical revisions to factors underlying the contributions.
As the Prime Minister said in his statement following the October European Council last year, in some years the UK adjustment has been negative and in some years we contribute a little bit more. This happens every year. However, what has never happened is for €2 billion to be demanded.
The Prime Minister also made clear that it was an unacceptable way for the Commission to suddenly present a bill like this for such a vast sum of money and with so little time to pay it.
Commission Vice-President Georgieva confirmed that there was no way that Member States could have known the net figure until 17 October 2014.
Following intensive discussions with the Commission and at the November ECOFIN meeting, the Government halved the bill for the UK, delayed the bill, will pay no interest on the bill, and has changed the rules of the European Union so that such unacceptable behavior never happens again.
Asked by: Lord Ashcroft (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government whether there has been any decline in stamp duty receipts on higher priced properties since public talk of a "mansion" tax began.
Answered by Lord Deighton
Statistics on Stamp Duty Land Tax receipts by consideration band can be found in Table 3.1 of the ‘UK Stamp Tax Statistics 2013-14’ publication. The following table provides data, from that publication, for the estimated yield attributable to residential property within the £1 million to £2 million and above £2 million consideration bands for 2012-2013 and 2013-2014:
£1,000,001-£2,000,000 | Above £2,000,000 | ||
Non-corporate bodies | Corporate bodies | ||
2012-2013 | 585 | 800 | 70 |
2013-2014 | 805 | 1,010 | 70 |
Amounts: £ million. Figures may not sum due to rounding conventions
Asked by: Lord Ashcroft (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government whether they are aware of the calculations used by the European Commission as a basis for the recent demand of £1.7 billion; and, if so, what is their assessment of those calculations.
Answered by Lord Deighton
The European Commission are responsible for calculating Member State contributions to the EU Budget using data provided by Eurostat, who collate and validate the data from Member States’ national statistical institutions, including for the UK the Office for National Statistics.
The Prime Minister has been clear that it was completely unacceptable for the European Commission to demand a payment upfront on such a large scale and provide a month in which to pay it.
European Finance Ministers met on the 7 November, and the Chancellor secured an agreement which meant the UK paid nothing on 1 December. Instead the payment will be made in instalments next year, and no fines or interest will be applied. The UK will also not pay £1.7 billion. The British rebate will apply in full, and apply simultaneously with the payment, not a year in arrears as normal. This means the Government has halved the bill, to around £850 million.
Lastly, the UK won agreement to change the regulations to ensure this never happens again. In the future, if any country receives an adjustment demand that is excessive, it will have the same opportunity to phase payments so that they are more affordable.
Asked by: Lord Ashcroft (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what were their estimates of the United Kingdom contribution to the European Union budget in 2014–15 prior to the communication of the increased contribution of £1.7 billion now sought by the European Commission.
Answered by Lord Deighton
The Office for Budget Responsibility’s (OBR) forecast of March 2014, estimates the UK’s net contribution to the EU Budget for 2014-15 as £9.1 billion.
Full information can be found in Table 2.21 of the OBR’s “economic and fiscal outlook supplementary fiscal table”[1].
[1] http://budgetresponsibility.org.uk/economic-fiscal-outlook-march-2014/.