Asked by: Angus Brendan MacNeil (Independent - Na h-Eileanan an Iar)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many people are subject to the Loan Charge as at 21 April 2021.
Answered by Jesse Norman
HMRC’s latest estimates of those affected by the Loan Charge are included in their GOV.UK publication titled Independent Loan Charge review: HMRC report on implementation.
As set out in this report, in January 2020, HMRC wrote to more than 55,000 individuals and employers who were identified as potentially affected by the Loan Charge. HMRC estimate the changes to the Loan Charge enacted in Finance Act 2020 took 11,000 people out of paying the charge altogether.
The report goes on to state that 5,600 employers and individuals settled their use of disguised remuneration schemes in the period to 30 September 2020.
Asked by: Angus Brendan MacNeil (Independent - Na h-Eileanan an Iar)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when applications will open for the SME Brexit Support Fund.
Answered by Jesse Norman
The Government has recently announced a £20 million SME Brexit Support Fund to help small and medium sized businesses (SMEs) adjust to new customs, rules of origin, and VAT rules when trading with the EU. It is due to open for applications shortly.
Asked by: Angus Brendan MacNeil (Independent - Na h-Eileanan an Iar)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 4 February 2021 to Question 144640 on Customs Grant Scheme, if he will allocate additional funding to the Customs Grant Scheme to allow businesses on the waiting list for that scheme to receive support.
Answered by Jesse Norman
In total, the Government has made over £80 million available to support businesses to deal with EU trade after 2020. The fund has now been fully allocated, no further applications are being accepted and a waiting list is being maintained by the grant scheme administrator.
The end of the transition period offers new opportunities to the intermediaries sector and means there are increased demands for the services of an intermediary, meaning intermediaries will be receiving significant income. Further Government support with cash flow remains available through the Coronavirus Business Interruption Loan Scheme (CBILS) and related schemes.
In addition, the Government recently announced a £20 million SME Brexit Support Fund to support small and medium sized businesses (SMEs) to adjust to new customs, rules of origin, and VAT rules when trading with the EU. More information can be found at https://www.gov.uk/guidance/grants-to-help-small-and-medium-sized-businesses-new-to-importing-or-exporting.
Asked by: Angus Brendan MacNeil (Independent - Na h-Eileanan an Iar)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether additional funding will be made available for the Customs Grant Scheme.
Answered by Jesse Norman
Businesses have been applying enthusiastically to the Grant Scheme and the Government is nearing full allocation of the funds. Applications are considered on a first come first served basis. If applications cannot be fulfilled due to funding, applicants will be placed on a waiting list to have funds allocated if and when funds are returned.
There is also support available for businesses through the Coronavirus Business Interruption Loan Scheme (CBILS), and related schemes. These schemes can be accessed even if a business has applied for grants, and they provide support for businesses that have been affected by the COVID-19 pandemic. Loans can be used for any purpose, including for growth.
Asked by: Angus Brendan MacNeil (Independent - Na h-Eileanan an Iar)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what contingency plans he has with respect to the UK's future relationship with the EU in the event of a UK-based companies experiencing tax and trading difficulties after the transition period.
Answered by Jesse Norman
The Government has provided extensive guidance to traders to support them in their preparations for the end of the transition period, including publishing the detailed Border Operating Model to help traders take the necessary steps.
The Government continues to work closely with industry to ensure they are engaging with the new requirements and can take the necessary steps to prepare, including through the latest public information campaign, cross-Government industry steering groups, webinars and events.
The Government will continue to engage with industry beyond the end of transition period to understand any concerns and identify any further support required.
Asked by: Angus Brendan MacNeil (Independent - Na h-Eileanan an Iar)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what contingency plans he has with respect to the UK's future relationship with the EU in the event of manufacturers encountering difficulties with importing components after the transition period.
Answered by Jesse Norman
The Government has provided extensive guidance to traders to support them in their preparations for the end of the transition period, including publishing the detailed Border Operating Model to help traders take the necessary steps.
Recognising the impact of coronavirus on businesses’ ability to prepare, the UK Government has taken the decision to introduce the new border controls in three stages up until 1 July 2021. From 1 January to 30 June, traders when importing non-controlled EU goods to GB will have the option to make a declaration in their own records at the time of import followed by a supplementary declaration up to 175 days later, which provides traders and intermediaries with more time to prepare.
HMRC continue to work closely with industry to ensure they are engaging with the new requirements and can take the necessary steps to prepare, including through the latest public information campaign, cross-Government industry steering groups, webinars and events.
HMRC will continue to engage with industry beyond the end of the transition period to understand any concerns and identify any further support that HMRC can provide.
Asked by: Angus Brendan MacNeil (Independent - Na h-Eileanan an Iar)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what economic impact assessment he has undertaken of (a) not extending tax-free shopping to EU-bound passengers from 1 January 2021, and (b) withdrawing tax-free shopping from passengers travelling to non-EU destinations from 1 January 2021; and if he will publish that impact assessment.
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 (UK) 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 UK, with alcohol allowances significantly increased.
- The VAT Retail Export Scheme (RES) in Great Britain will not be extended to EU residents 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 is also continueing to meet and discuss with stakeholders following the announcement of these policies.
The detailed rationale for these changes are included in the written ministerial statement and summary of responses to the recent consultation: https://questions-statements.parliament.uk/written-statements/detail/2020-09-11/hcws448 and https://www.gov.uk/government/consultations/a-consultation-on-duty-free-and-tax-free-goods-carried-by-passengers.
HMRC estimate that VAT RES refunds cost around £0.5 billion in VAT in 2019 for around 1.2 million non-EU visitors. In 2019 the ONS estimate there were substantially more EU visitors (24.8 million) than non-EU passengers (16.0 million) to the UK. This implies an extension to EU residents would significantly increase the cost by up to an estimated £0.9 billion. This would result in a large amount of deadweight loss by subsidising spending from EU visitors which already happens without a refund mechanism in place, potentially taking the total cost up to around £1.4 billion per annum.
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.
HMRC estimate that around £150 million of VAT is not charged as a result of tax-free airside sales. As with the VAT RES, extending the relief to the EU would significantly increase the cost of the scheme and result in a large amount of deadweight loss by subsidising spending from EU-bound passengers which already happens.
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.