Asked by: Alan Brown (Scottish National Party - Kilmarnock and Loudoun)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of how many people will benefit from the abolition of the lifetime allowance cap in (a) 2023-24, (b) 2024-25, (c) 2025-26, (d) 2026-27 and (e) 2027-28.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
Information on the abolition of the lifetime allowance can be found in the Pension Tax Limits Policy paper Pension Tax Limits - GOV.UK (www.gov.uk)
Abolition of the Lifetime Allowance cap also provides certainty that money saved into a pension will not be subject to a cap on lifetime tax-relieved pension savings, even for those who may not currently be modelled as hitting it.
Asked by: Alan Brown (Scottish National Party - Kilmarnock and Loudoun)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to paragraph 5.6 of the Autumn Statement, CP 751, published on 17 November, what the funding mechanism is for the additional £6bn funding for energy efficiency for the period 2025-2028.
Answered by James Cartlidge - Shadow Secretary of State for Defence
An additional £6 billion of funding for energy efficiency and clean heat announced at the Autumn Statement is classified as capital department expenditure limit (CDEL) for FY 2025/26, 26/27 and 27/28. This funding has not been allocated to particular schemes. The BEIS Secretary of State will announce further details about the Energy Efficiency Taskforce in due course.
Asked by: Alan Brown (Scottish National Party - Kilmarnock and Loudoun)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what the investment allowance rate is for (a) oil and gas exploration companies and (b) renewable energy generators.
Answered by James Cartlidge - Shadow Secretary of State for Defence
The UK government places additional taxes on the extraction of oil and gas, with companies engaged in the production of oil and gas in the UK and on the UK Continental Shelf subject to a combined headline tax rate on their profits of 40%. The Energy Profits Levy was introduced in May as a temporary 25% tax on top of this (the rate will rise to 35% from 1 January 2023). The Energy Profits Levy will end on 31 March 2028.
All companies within the UK tax charge acquiring plant and machinery for oil and gas exploration can claim a full deduction for the cost of their investments against taxable profits. In addition, specific investment reliefs are available when computing taxable profits, including an investment allowance within the Energy Profits Levy, which means for every £1 businesses invest they will overall get a 91p tax saving.
Renewable energy generators pay corporation tax at a significantly lower rate of 19% (this will rise to 25% from 1 April 2023). Such companies can also claim capital allowances, including the Annual Investment Allowance and super-deduction, in order to reduce their taxable profits subject to Corporation Tax.
While renewable electricity generators will be subject to the new, temporary Electricity Generator Levy – an additional 45% levy from 1 Jan 2023 – whereas the Energy Profits Levy will apply to profits without a direct link to market prices, the Electricity Generator Levy will be focused on extraordinary returns from selling output at prices which could be regarded as ‘exceptional’ compared to historic levels. This means that the levy would not apply where prices return to historic norms. Regarding investment, the Electricity Generator Levy should not detract from the wider measures the government is taking to support investment in this space, including committing £30 billion to support the domestic green industrial revolution from March 2021 to the end of 2027-28. Going forward, renewable electricity will be increasingly generated under the Contracts for Difference (CfD) regime and the Electricity Generator Levy would not apply to deployment covered by CfD.