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 - Shadow Leader of the House of Commons
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 - Shadow Leader of the House of Commons
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 - Shadow Leader of the House of Commons
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 - Shadow Leader of the House of Commons
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 - Leader of HM Official Opposition
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 - Shadow Leader of the House of Commons
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
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.
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department plans to use tax receipts held by the HMRC in parity with the Self-Employment Income Support Scheme to determine financial support for freelancers in the North Sea oil and gas supply industry facing financial difficulties.
Answered by Jesse Norman - Shadow Leader of the House of Commons
The Self-Employment Income Support Scheme?will allow eligible individuals to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for 3 months.??Self-employed individuals, including members of partnerships, are eligible if they have submitted their Income Tax?Self Assessment?tax return for the tax year 2018-19, continued to trade and have lost trading/partnership trading profits due to COVID-19.
Alternatively, those who were on an employer's PAYE payroll on 19 March may be eligible to receive 80% of their usual monthly wages up to a maximum of £2,500 per month through the Coronavirus Job Retention Scheme (CJRS). The CJRS is available to employers, including personal service companies, and individuals paying themselves a salary through a PAYE scheme are eligible.? The scheme covers employees on any type of contract, including full-time, part-time, agency, flexible or zero-hour contracts.
These schemes supplement the other significant support announced for UK businesses, including the Coronavirus Business Interruption Loan Scheme and the deferral of tax payments. More information about the full range of business support measures is available at?www.businesssupport.gov.uk/coronavirus-business-support/
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will keep VAT to five per cent on new solar panel installations.
Answered by Jesse Norman - Shadow Leader of the House of Commons
To comply with a ruling of the Court of Justice of the European Union, the Government is required to make changes to the reduced rate of VAT for the installation of certain energy saving materials.
The changes have been made to comply with the ruling, whilst maintaining as much of the relief as possible. The VAT treatment of the vast majority of solar panel installations is expected to be unaffected by the changes.
Asked by: Christine Jardine (Liberal Democrat - Edinburgh West)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, with reference to pages 5 and 16 of the Customs Bill White Paper (Cm 9502), whether the Government plans to negotiate a (a) highly streamlined customs arrangement or (b) new customs partnership with the EU.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
In ‘Future customs arrangement – a future partnership paper’, the Government made it clear that in assessing the options for the UK’s future customs arrangements outside the EU Customs Union, the Government will be guided by what delivers the greatest economic advantage to the UK, and by three strategic objectives:
Ensuring UK-EU trade is as frictionless as possible;
Avoiding a ‘hard border’ between Ireland and Northern Ireland; and
Establishing an independent international trade policy.
The Government has identified two broad approaches to a future customs relationship with the EU that would facilitate these objectives – the ‘highly streamlined customs arrangement’ and a ‘new customs partnership’.
The Government is engaging with businesses from across the UK in order to develop these options further in advance of negotiations and ensure they meets business needs and contribute to the UK’s future prosperity.