Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it the policy of the Government to extend exemption from income tax for the year 2020-21 to people who work full time overseas but have remained in the UK for a longer period than intended in the tax year as a result of the closure of international borders and restrictions on international travel.
Answered by Jesse Norman
The Government believes the UK’s current residency rules broadly deliver outcomes for taxpayers that are fair and reasonable. It is a fundamental premise of the tax system that an individual who spends much of the tax year in the country will be treated as resident for tax purposes.
HMRC have published guidance which explains that in some circumstances, time spent in the UK due to Covid restrictions will not be counted as days spent in the UK for the purpose of the Statutory Residence Test under the ‘exceptional circumstances’ rule. However, the exceptional circumstances test excludes only up to 60 days of presence and so will not preserve non-resident status for an individual who is here for most of the year.
The Government does recognise that the current pandemic has caused immense difficulties for many people and this is why it has provided a very substantial economic support package.
Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the cost to the public purse of raising the maximum measurements for VAT zero rated clothing so that nine out of ten thirteen year olds come within the maximum measurements.
Answered by Jesse Norman
No estimate is available. I refer the Honourable Member to the answer given on 22 March 2021 to UIN 169785 for further information on this subject.
Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the cost to the public purse of categorising all school uniform as zero rated for VAT: and if he will make a statement.
Answered by Jesse Norman
Estimates of the number of children with the measurements requested are not available.
The UK is one of only two countries within the OECD to maintain a zero rate for children’s clothing, which costs £2 billion per year. Expanding this to include all school uniforms would come at a cost to the Exchequer, and would require reductions in spending or tax rises elsewhere.
The Government has no plans to review the VAT treatment of children’s clothing.
Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of children aged (a) 13, (b) 12, (c) 11 and (d) 10 whose measurements for clothing exceed the maximum to qualify for that clothing to be zero rated for VAT; and if he will make a statement.
Answered by Jesse Norman
Estimates of the number of children with the measurements requested are not available.
The UK is one of only two countries within the OECD to maintain a zero rate for children’s clothing, which costs £2 billion per year. Expanding this to include all school uniforms would come at a cost to the Exchequer, and would require reductions in spending or tax rises elsewhere.
The Government has no plans to review the VAT treatment of children’s clothing.
Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reason the temporary VAT exemption on personal protective equipment has not been extended beyond 31 October 2020; and if he will make a statement.
Answered by Jesse Norman
The temporary relief was designed to relieve the burden of VAT on the price of purchasing Personal Protection Equipment (PPE) used for protection from coronavirus by front line workers. Since then, the Department of Health and Social Care has stabilised the UK PPE supply chain and by the end of November, a four month stockpile of all COVID-critical PPE will be in place, with a tremendous contribution from UK manufacturers.
The temporary zero-rate of VAT on PPE is therefore no longer required and ended on 31 October 2020 as planned.
Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will (a) instruct the Valuation Office Agency to complete its work on the allocation of rateable values to the individual business premises at Aerodrome Studios, Airfield Way, Christchurch and (b) compensate businesses affected by the original decision not to allow the premises to be split for rating purposes following the reversal of that decision on appeal.
Answered by Jesse Norman
The Valuation Office Agency (VOA) has a statutory duty to maintain the Rating List by assessing the rateable value (RV) of all non-domestic properties in line with the appropriate legislation. The VOA carries out its valuations independently of ministers and is currently meeting its statutory deadlines in relation to its Check, Challenge, Appeal service.
Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when definitive advice will be available for removal companies on the customs documentation they will need from their customers in order to facilitate the transfer of their goods to destinations in the EU which are their new country of domicile; and whether there will be a central point to which that customs paperwork should be submitted.
Answered by Jesse Norman
The management of EU import and export procedures is the responsibility of the customs authorities of the Member States. It is important that businesses and individuals confirm the processes at their port of arrival and any conditions or procedures that may apply, such as the time limit goods may remain in the EU without the payment of duty. More information can be found online at https://ec.europa.eu/taxation_customs/home_en.
From 1 January 2021 export declarations and exit Safety and Security declarations will also be required for all goods moving from the UK to the EU. More information on export declarations can be found online at https://www.gov.uk/guidance/making-a-full-export-declaration.
Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the amount of Air Passenger Duty charged by airlines which has not been refunded to passengers who did not undertake their booked flights in the last six months; and if he will make it Government policy that Air Passenger Duty should be repaid to passengers without the imposition of an administration fee.
Answered by Kemi Badenoch - President of the Board of Trade
APD is a tax paid by airlines based on the number of passengers on board an aircraft that takes off from a UK airport. Whether airlines pass on the cost of the tax to their passengers is a commercial decision. If a pre booked passenger does not subsequently fly the airline has no APD liability for that passenger. HMRC does not collect information on such passengers.Where the cost is passed on by airlines, there is no legal obligation to refund this business charge. Refunds from airlines will be governed by the terms and conditions attached to the sale of the ticket. However, the government expects all airlines operating in the UK to make their terms and conditions, including their refund policy, clear at the time of booking.
Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will publish the economic impact assessment of the decision to end tax free sales for air passengers and the VAT refund scheme from 1 January 2020; and if he will make a statement.
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 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 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.
In 2019 HMRC estimate that VAT RES refunds cost around £0.5billion in VAT for around 1.2million 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 £0.9billion. 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 £1.4billion 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.
Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 21 September 2020 to Question 90033 on Coronavirus Job Retention Scheme, whether a business that repays a furlough grant to which it is entitled is liable for tax upon that grant notwithstanding its voluntary repayment.
Answered by Jesse Norman
A business that repays a furlough grant to which it is entitled is not liable for tax upon that grant. However, the employer will still need to record the grant in their forthcoming tax return.