Asked by: Charles Walker (Conservative - Broxbourne)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what mechanisms there are for companies to appeal the terms of accelerated payment notices issued by HM Revenue and Customs; and if he will make a statement.
Answered by Jane Ellison
The accelerated payment regime was introduced in Finance Act 2014 to change the underlying economics of tax avoidance by requiring disputed tax to be paid upfront while an avoidance scheme is being challenged. Disputed tax remains due and payable under the accelerated payment regime until such time as the dispute is settled by agreement with HM Revenue and Customs (HMRC) or the dispute is litigated and there is a judicial decision.
Where an accelerated payment has been made, it is repayable if HMRC agrees, or the courts decide, that the scheme in question does produce a tax advantage under the legislation.
Taxpayers can make representations to HMRC about an accelerated payment notice if they believe the conditions for issue have not been met or the amount shown is incorrect. They can also ask the courts to judicially review the issue of an accelerated payment notice.
Asked by: Charles Walker (Conservative - Broxbourne)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what provision there is for HM Revenue and Customs (HMRC) to set aside an accelerated payment notice when the company subject to that notice is seeking a negotiated settlement with HMRC.
Answered by Jane Ellison
The accelerated payment regime was introduced in Finance Act 2014 to change the underlying economics of tax avoidance by requiring disputed tax to be paid upfront while an avoidance scheme is being challenged. Disputed tax remains due and payable under the accelerated payment regime until such time as the dispute is settled by agreement with HM Revenue and Customs (HMRC) or the dispute is litigated and there is a judicial decision.
Where an accelerated payment has been made, it is repayable if HMRC agrees, or the courts decide, that the scheme in question does produce a tax advantage under the legislation.
Taxpayers can make representations to HMRC about an accelerated payment notice if they believe the conditions for issue have not been met or the amount shown is incorrect. They can also ask the courts to judicially review the issue of an accelerated payment notice.
Asked by: Charles Walker (Conservative - Broxbourne)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, if HM Revenue and Customs will make it its policy not to use accelerated payment notices when court proceedings relating to a case remain open.
Answered by Jane Ellison
The accelerated payment regime was introduced in Finance Act 2014 to change the underlying economics of tax avoidance by requiring disputed tax to be paid upfront while an avoidance scheme is being challenged. Disputed tax remains due and payable under the accelerated payment regime until such time as the dispute is settled by agreement with HM Revenue and Customs (HMRC) or the dispute is litigated and there is a judicial decision.
Where an accelerated payment has been made, it is repayable if HMRC agrees, or the courts decide, that the scheme in question does produce a tax advantage under the legislation.
Taxpayers can make representations to HMRC about an accelerated payment notice if they believe the conditions for issue have not been met or the amount shown is incorrect. They can also ask the courts to judicially review the issue of an accelerated payment notice.
Asked by: Charles Walker (Conservative - Broxbourne)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, whether tax planning schemes entered into before 2 November 2004 are covered by the anti-avoidance measures conducted in the 2004 Finance Act.
Answered by Jane Ellison
The Disclosure of Tax Avoidance Schemes (DOTAS) regime was introduced by the Finance Act 2004. Depending on the exact nature of the tax avoidance arrangements, schemes made available or entered into after 17 March 2004 had to be disclosed. Schemes entered into before introduction of the DOTAS rules would not fall to be disclosable under that regime.
Asked by: Charles Walker (Conservative - Broxbourne)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what information his Department holds on how many money service businesses had their bank accounts closed in (a) 2013-14, (b) 2014-15 and (c) 2015-16.
Answered by Harriett Baldwin
The FCA have recently published a report on the nature and scale of de-risking in the UK. The report reinforces the view that de-risking is driven by a variety of factors, not just anti money-laundering compliance or a fear of regulatory action. From a data set of 23 banks the report noted that “tracking the proportionately tiny number of closures linked to financial crime concerns within this immense dataset is thus inherently challenging, especially if the reason for closure is primarily commercial, with a small component of the equation relating to ‘increased compliance costs’.”
However the report does indicate that the rate of customer exits has accelerated over the last 2-3 years.
Data from HM Revenue and Customs (the supervisor of Money Service Businesses outside the banking sector) shows that there are about 2000 MSB’s principals registered to trade with approximately 45,000 agents around the UK. It is a large and diverse sector. HMRC does hold data on the number of de-registered MSB’s, however given that MSB’s are not required to provide HMRC with information on when they have had their bank accounts closed, data on MSB’s effected by de-risking is not available.
Asked by: Charles Walker (Conservative - Broxbourne)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what assessment his Department has made of trends in the level of banks closing accounts of money service businesses on grounds relating to adherence to money-laundering regulations since July 2013.
Answered by Harriett Baldwin
The FCA have recently published a report on the nature and scale of de-risking in the UK. The report reinforces the view that de-risking is driven by a variety of factors, not just anti money-laundering compliance or a fear of regulatory action. From a data set of 23 banks the report noted that “tracking the proportionately tiny number of closures linked to financial crime concerns within this immense dataset is thus inherently challenging, especially if the reason for closure is primarily commercial, with a small component of the equation relating to ‘increased compliance costs’.”
However the report does indicate that the rate of customer exits has accelerated over the last 2-3 years.
Data from HM Revenue and Customs (the supervisor of Money Service Businesses outside the banking sector) shows that there are about 2000 MSB’s principals registered to trade with approximately 45,000 agents around the UK. It is a large and diverse sector. HMRC does hold data on the number of de-registered MSB’s, however given that MSB’s are not required to provide HMRC with information on when they have had their bank accounts closed, data on MSB’s effected by de-risking is not available.
Asked by: Charles Walker (Conservative - Broxbourne)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, whether he plans to increase the scope of the Financial Conduct Authority's terms of reference to include the application of the Treating Customers Fairly policy to banks.
Answered by Harriett Baldwin
The Financial Conduct Authority (FCA) is operationally independent of Government and its remit is set out in the Financial Services and Markets Act 2000.
Under the FCA’s policy, banks which are regulated by the FCA are already required to treat customers fairly. Principle 6 of the FCA’s Principles for Businesses states: A firm must pay due regard to the interests of its customers and treat them fairly.
Asked by: Charles Walker (Conservative - Broxbourne)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, with reference to recommendations 12 and 22 of the Financial Action Taskforce guidance, entitled Potentially Exposed Persons, what steps the Government has taken to provide guidance to financial institutions and Designated Non-financial Businesses and Professions on what constitutes a prominent public function for domestic and foreign politically exposed persons; and if he will make a statement.
Answered by Harriett Baldwin
In line with the Financial Action Task Force’s international standards, the Government believes that institutions should take reasonable measures to determine whether an individual qualifies as a Politically Exposed Person. The Money Laundering Regulations 2007 set out a non-exhaustive list of individuals who could be politically exposed. The FCA and the Joint Money Laundering Steering Group have published further guidance to assist the industry in identifying and banking Politically Exposed Persons.
Asked by: Charles Walker (Conservative - Broxbourne)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what assessment he has made of the likely effect of the Fourth Money Laundering Directive on the ability in future of members of the House of Lords to continue to serve on the boards of banks and financial services companies; and if he will make a statement.
Answered by Harriett Baldwin
Under the Fourth Anti-Money Laundering Directive, which will be transposed into national law by June 2017, a politically exposed person is one who has been entrusted with a prominent public function domestically or by a foreign country. The Government will publish an Impact Assessment in due course. This will set out the benefits and costs for businesses in a wide range of sectors, including banking and financial services.
The changes proposed under the Directive should not prevent any individual in this category from gaining or maintaining access to financial services. Board appointments will remain a matter for individual banks and financial services companies in line with relevant codes and regulations. The Treasury regularly raises the Directive with financial institutions and the regulator, and we encourage financial institutions to take a proportionate, risk-based approach when applying these measures.
Asked by: Charles Walker (Conservative - Broxbourne)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what assessment he has made of the potential effect of implementation of the Fourth EU Money Laundering Directive, 2015/849 on trade between US and European banks and financial service companies and their UK equivalents which include on their Board a Member of the House of Lords.
Answered by Harriett Baldwin
Under the Fourth Anti-Money Laundering Directive, which will be transposed into national law by June 2017, a politically exposed person is one who has been entrusted with a prominent public function domestically or by a foreign country. The Government will publish an Impact Assessment in due course. This will set out the benefits and costs for businesses in a wide range of sectors, including banking and financial services.
The changes proposed under the Directive should not prevent any individual in this category from gaining or maintaining access to financial services. Board appointments will remain a matter for individual banks and financial services companies in line with relevant codes and regulations. The Treasury regularly raises the Directive with financial institutions and the regulator, and we encourage financial institutions to take a proportionate, risk-based approach when applying these measures.