Asked by: Anneliese Dodds (Labour (Co-op) - Oxford East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if his Department will make an assessment of the effect on the level of inward investment in each year since 2010 of Government corporation tax policy changes since 2010.
Answered by Jesse Norman
The estimated economic impacts of reductions in the rate of Corporation Tax since 2010 were reflected in the OBR’s forecasts at the time those reductions were announced and detailed in the OBR’s published Economic and Fiscal Outlook.
Asked by: Anneliese Dodds (Labour (Co-op) - Oxford East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department plans to publish the document entitled HMT ministers' meetings, hospitality, gifts and overseas travel: 1 April to 31 July 2020.
Answered by Kemi Badenoch - President of the Board of Trade
The transparency data titled: ‘HMT ministers' meetings, hospitality, gifts and overseas travel: 1 April to 30 June 2020’ was published here on 29 October 2020: https://www.gov.uk/government/publications/hmt-ministers-meetings-hospitality-gifts-and-overseas-travel-1-april-to-30-june
However, it wasn’t added to the collection page on gov.uk at that time due to an administrative error. It can now be viewed on the GOV.UK collection page at the following link https://www.gov.uk/government/collections/hmt-ministers-meetings-hospitality-gifts-and-overseas-travel
Asked by: Anneliese Dodds (Labour (Co-op) - Oxford East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether investment in software can qualify for 130 per cent super-deduction capital allowance in 2021-22 and 2022-23 under section 815 of the Corporation Tax Act 2009.
Answered by Jesse Norman
The super-deduction capital allowance will allow companies to reduce their taxable profits by 130% of the value of their investment in plant and machinery.
Investment in software can be classified as either a revenue expenditure, in which case it is deductible for tax purposes, or a capital expenditure, in which case it is generally addressed through the intangibles regime instead. This means software would be ineligible for the super-deduction.
However, if a company wishes, they can choose to make an election under s815 Corporation Tax Act 2009 to remove software from the intangibles regime and instead claim capital allowances. In this case, the super-deduction will be available.
Asked by: Anneliese Dodds (Labour (Co-op) - Oxford East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps are being taken by HMRC to ensure there is uniform interpretation of customs rules at different entry points into the UK.
Answered by Jesse Norman
HMRC are supporting and building trader capability to ensure compliance across different entry points in the UK during staged controls and when full controls are put in place in January 2022.
Asked by: Anneliese Dodds (Labour (Co-op) - Oxford East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to increase the uptake of the Social Investment Tax Relief.
Answered by Jesse Norman
The Social Investment Tax Relief (SITR) was introduced in 2014 to encourage risk finance investments in qualifying social enterprises. HMRC statistics show that up to 2018-19, about 110 enterprises have used the scheme to raise £11.2 million.
At the Budget on 3 March, the Government announced that SITR would be extended for two years, until April 2023, to continue support for qualifying investments into social enterprises. SITR will be extended with its current eligibility rules and targeting, to ensure that the scheme continues to focus on higher risk social enterprises that face the greatest difficulties in accessing finance.
The Government keeps all taxes and reliefs under review in order to ensure they continue to meet policy objectives in a way that is fair and effective. The Government previously published a Call for Evidence in 2019 on SITR’s use to date. The Government will publish a Summary of Responses to this on 23 March.
Asked by: Anneliese Dodds (Labour (Co-op) - Oxford East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential effect on economic activity and investment of the corporation tax taper from 2023-24 on profits between £50,000 and £250,000.
Answered by Jesse Norman
The taper on profits between £50,000 and £250,000 is designed to ensure that the benefit of the small profits rate is targeted at the smallest businesses, while at the same time minimising economic distortions for those to which it applies.
Companies with profits within the taper will continue to be subject to an effective tax rate on profit that is below the main rate.
The economic impacts of the Corporation Tax rate increase are forecast by the independent Office for Budget Responsibility and contained within its Economic and Fiscal Outlook.
Asked by: Anneliese Dodds (Labour (Co-op) - Oxford East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to prevent larger businesses dividing into several smaller businesses in order to be eligible for the new small profits rate of corporation tax from 2023-24.
Answered by Jesse Norman
The lower profit limit, below which companies will be eligible for the small profits rate, will be reduced in proportion to the number of associated companies a company has. This is designed to prevent companies with profits over the small profits thresholds from being divided up in an attempt to take advantage of the lower rate. The upper profit limit will also be subject to this rule. Associated companies rules also applied under the previous small profits rate.
Asked by: Anneliese Dodds (Labour (Co-op) - Oxford East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the corporation tax super deduction on levels of fraud, abuse and tax avoidance relating to corporation tax.
Answered by Jesse Norman
Expenditure on the provision of plant and machinery for leasing is not eligible for the new 130% super-deduction capital allowance, as is the case with other first year allowances such as Enhanced Capital Allowances in Enterprise Zones.
The super-deduction applies to investment on qualifying plant and machinery, including where that plant and machinery is for the purposes of digital transformation.
The Government takes fraud, abuse and tax avoidance very seriously, which is why the Government has taken repeated action at fiscal events to tackle fraud, abuse and avoidance in the tax system.
The super-deduction has been designed to safeguard against those risks. The legislation includes an anti-avoidance provision that applies to counteract arrangements which are contrived, abnormal or lacking a genuine commercial purpose. Further, there are existing rules that exclude connected party transactions from first-year allowances.
Asked by: Anneliese Dodds (Labour (Co-op) - Oxford East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department plans to offer a retention incentive to businesses who continue to employ furloughed workers following the withdrawal of the Job Retention Bonus.
Answered by Jesse Norman
The objective of the Job Retention Bonus (JRB) was to incentivise employers to retain employees between November, when the Coronavirus Job Retention Scheme (CJRS) was due to end, and the end of January through a £1,000 bonus paid to the employer. However, the subsequent extension of the CJRS to April (now September) allowed employers to retain their staff during that period by covering 80% of the furloughed employees’ wages. Given this further extension to the end of September, the policy intent of the JRB falls away.
The Government remains committed to redeploying a retention incentive at the appropriate time.