Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had (a) with Cabinet colleagues and (b) within his Department on compensation and support for those affected by the Equitable Life scandal.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
I refer the Honourable Member for Edinburgh West to the answer I gave on the 19 April 2021 to PQ UIN 179543.
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Business Banking Resolution Service (BBRS), if he will take steps to (a) encourage the adoption of the BBRS by banks to ensure accessibility, (b) resolve the outstanding terms of reference including eligibility and insolvency, (c) finalise and publish the BBRS process to deliver the service specified by the terms of reference, (d) demonstrate the independence of the BBRS and (e) enable the BBRS to resolve historical complaints.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government welcomes the Business Banking Resolution Service (BBRS), which launched on the 15th February 2021. The BBRS offers a free, independent service which is designed to settle unresolved complaints from larger SMEs with the seven participating banks, who make up the majority of the business banking market.
The former Chancellor, Philip Hammond wrote to the BBRS in 2018 to make clear that it is right the BBRS does not seek to re-open complaints that have already been settled under a previous independent redress scheme, but instead offers an opportunity for resolution to SMEs who have not had anywhere independent to take their complaint.
Beyond that high-level guidance, I would like to stress the BBRS has been setup as an independent non-governmental body, and this independence is vital to its role. Its credibility, authority and value to SMEs would be undermined if it were possible for the Government to intervene in such matters.
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will take steps to ensure that businesses' insurance claims relating to the effects of the covid-19 outbreak are settled in a timely manner.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Financial Conduct Authority (FCA) rules require insurers to handle claims fairly and promptly and settle claims quickly once settlement terms are agreed. The FCA has said that, in light of COVID-19, insurers must consider very carefully the needs of their customers and show flexibility in their treatment of them.
The Government is working closely with the FCA to ensure that the rules are being upheld during this crisis and fully supports the regulator in its role.
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of introducing Capital Gains Tax at Income or Corporation Tax rates under a taper relief system with a proportional reduction for each year an asset has been held.
Answered by Jesse Norman
The Government keeps all taxes under review, and any changes are made at fiscal events within the context of wider public finances. The Government’s priority is supporting jobs and the economy, through the Winter Economy Plan, Plan for Jobs and the forthcoming Budget.
Any changes to the tax system will balance the need to raise revenue with the principles of fairness and market efficiency.
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of combining Income Tax and National Insurance contributions into an Income, Health and Pension Tax with health and pension provision paid until retirement or 65-67 years of age on all earned income (a) with no tax or health and pension until a minimum level of income is achieved, (b) at a basic rate and (c) at a reasonable higher rate.
Answered by Jesse Norman
This would be a significant change, as NICs and Income Tax work quite differently at present.
NICs are charged on earnings on a per-employment, per-pay period basis, whereas Income Tax is an annual tax, and takes into account an individual’s total, cumulative earnings over the year. NICs also come with specific benefits e.g. State Pension, Jobseeker’s Allowance (JSA), Maternity Allowance, and Bereavement benefits. This is in line with NICs’ role as a social security scheme, into which contributions are made from people’s earnings while in work to support them when they are out of work. NICs are currently not payable by those over State Pension age. As such, amalgamating NICs into, or even bringing them closer into line with, income tax would come with major transitional costs and issues.
In the past, governments have considered the case for amalgamating or better aligning income tax and NICs to make the system simpler for individuals and businesses. Most recently, the Office of Tax Simplification (OTS) considered this in 2016 in its report on ‘Closer alignment of Income Tax and National Insurance’.
The OTS analysis shows there are a range of challenges that would need to be taken into consideration before proceeding with such a radical reform. For example, it is estimated that 7.1 million would pay less NICs but 6.3 million would pay more NICs (some of whom would gain contributory benefits).
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of replacing commercial rates and VAT with a sales and service tax on all sales and services provided within the UK, to help provide a more level playing field for retailers.
Answered by Jesse Norman
The Government is committed to a fair and sustainable tax system which creates an environment for businesses to succeed.
As the economy moves towards recovery the Government must continue to support businesses, while ensuring that the tax system raises sufficient revenue to fund public services.
The Government keeps all taxes under review.
This includes business rates where a Call for Evidence was published in July 2020. The Government invited stakeholders to contribute their views on ideas for reform on all elements of the business rates system in England, including alternative taxes and the potential for an Online Sales Tax. The Government is now considering responses to the Call for Evidence.
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of simplifying and equalising tax rules affecting companies, partnerships, and sole traders.
Answered by Jesse Norman
The Government remains committed to a tax system that wherever possible is simple, fair and easy to use, including in relation to the taxation of companies, partnerships and sole traders. It will continue to consider recommendations made by the independent Office of Tax Simplification, and keeps all taxes under review. Any changes to tax policy will be announced at fiscal events.
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on the retail, tourism and hospitality sectors in (a) Edinburgh and (b) Scotland of the decision to withdraw tax free shopping from 1 January 2021.
Answered by Kemi Badenoch - President of the Board of Trade
Ahead of the end of the transition period, the Government has announced the VAT and excise duty treatment of goods purchased by individuals for personal use and carried in their luggage arriving from or going overseas (passengers). The following rules will apply from 1 January 2021:
- Passengers travelling from Great Britain to any destination outside the United Kingdom will be able to purchase duty-free excise goods once they have passed security controls at ports, airports, and international rail stations.
- Personal allowances will apply to passengers entering Great Britain from a destination outside of the United Kingdom, with alcohol allowances significantly increased.
- The VAT Retail Export Scheme in Great Britain will not be extended to passengers travelling to the EU and will be withdrawn for all passengers.
- The concessionary treatment on tax-free sales for non-excise goods will be removed across the UK.
The Government published a consultation which ran from 11 March to 20 May. During this time the Government held a number of virtual meetings with stakeholders to hear their views and received 73 responses to the consultation. The Government has also continued to meet and discuss with key stakeholders following the announcement of these policies.
The concessionary treatment on tax-free sales currently affects airports that fly to non-EU destinations. The extension of duty-free sales to EU bound passengers will be a significant boost to all airports in England, Scotland and Wales, including Edinburgh and Glasgow and smaller regional airports which have not been able to offer duty-free to the EU before.
The final costings will be subject to scrutiny by the independent Office for Budget Responsibility and will be set out at the next forecast.
The Government also recognises the challenges the aviation sector is facing as it recovers from the impacts of Covid-19 and has supported the sector throughout the pandemic, and continues to do so, including schemes to raise capital, flexibilities with tax bills, and financial support for employees.
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, on what date HMRC plans to reinstate its fraud hotline.
Answered by Jesse Norman
HM Revenue and Customs (HMRC) reopened the hotline telephony service on Monday 3 August. It operates 09:00-17:00, Monday-Friday. It is also worth noting that the online reporting function has been available 24/7 throughout the pandemic.
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of introducing a universal basic income.
Answered by Steve Barclay - Secretary of State for Environment, Food and Rural Affairs
There are fundamental problems with the reality of a Universal Basic Income (UBI). A flat rate UBI would not take into account people’s circumstances, and the additional costs faced by some individuals. Therefore, a UBI would not target support where it is most needed.
To protect people’s incomes during the Covid-19 crisis, the Government has announced alternative measures, including the Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme, and additional support for low income families which can be delivered quickly and effectively through the existing welfare system. This includes increasing the Universal Credit (UC) standard allowance, the Working Tax Credit basic element, and the rates used to calculate Housing Benefit and the UC housing element. At a time when the Department for Work and Pensions and HM Revenue and Customs are experiencing unprecedented demand, we have rightly prioritised the safety and stability of the existing tax and benefit systems.