Asked by: Greg Smith (Conservative - Buckingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with representatives of the hospitality industry on the impact of VAT rates returning to 20 per cent by 2022.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The temporary reduced rate of VAT was introduced on 15 July 2020 to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs in the hospitality and tourism sectors. As announced at Budget 2021, the Government has extended the temporary reduced rate of VAT of 5% for the tourism and hospitality sector. This relief ended on 30 September. On 1 October 2021, a new reduced rate of 12.5% was introduced to help ease affected businesses back to the standard rate. This new rate will end on 31 March 2022.
This relief will cost over £7 billion and, while all taxes are kept under review, there are no plans to extend the 12.5% reduced rate of VAT. The Government has been clear that this relief is a temporary measure designed to support the cash flow and viability of sectors that have been severely affected by COVID-19. It is appropriate that as restrictions are lifted and demand for goods and services in these sectors increases, the temporary tax reliefs are first reduced and then removed in order to rebuild and strengthen the public finances.
Asked by: Greg Smith (Conservative - Buckingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on employment in the hospitality sector when VAT is returned to 20 per cent for this sector.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The temporary reduced rate of VAT was introduced on 15 July 2020 to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs in the hospitality and tourism sectors. As announced at Budget 2021, the Government has extended the temporary reduced rate of VAT of 5% for the tourism and hospitality sector. This relief ended on 30 September. On 1 October 2021, a new reduced rate of 12.5% was introduced to help ease affected businesses back to the standard rate. This new rate will end on 31 March 2022.
This relief will cost over £7 billion and, while all taxes are kept under review, there are no plans to extend the 12.5% reduced rate of VAT. The Government has been clear that this relief is a temporary measure designed to support the cash flow and viability of sectors that have been severely affected by COVID-19. It is appropriate that as restrictions are lifted and demand for goods and services in these sectors increases, the temporary tax reliefs are first reduced and then removed in order to rebuild and strengthen the public finances.
Asked by: Greg Smith (Conservative - Buckingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps HMRC is taking against umbrella companies who advised their clients to use disguised remuneration schemes.
Answered by Jesse Norman
The Government and HM Revenue and Customs (HMRC) are determined to continue to tackle promoters and operators of tax avoidance schemes. This includes challenging the entities, including umbrella companies, and individuals who promote disguised remuneration schemes.
Umbrella companies advising individuals to use disguised remuneration tax avoidance schemes are treated as promoters or enablers by HMRC. Where appropriate, they are subject to the range of measures laid out in HMRC’s strategy for tackling promoters of tax avoidance schemes, published on 19 March 2020. The strategy sets out HMRC’s work to date and outlines how HMRC will continue to take robust actions against promoters of tax avoidance. The Promoter Strategy is available on GOV.UK.
The Government announced new measures at Budget 2020, which will strengthen the existing regimes and which will help HMRC act more swiftly against promoters and enablers. The Government has also announced that it will consult in the spring on further measures to tackle promoters.
Asked by: Greg Smith (Conservative - Buckingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of how many medical professionals are (a) subject to or (b) have settled to avoid being subject to the Loan Charge.
Answered by Jesse Norman
HMRC do not hold the requested estimates and do not routinely collect data on profession.
Asked by: Greg Smith (Conservative - Buckingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate his Department has made of the number of armed forces veterans that (a) are subject to or (b) have settled to avoid being subject to the Loan Charge.
Answered by Jesse Norman
HMRC do not hold the requested estimates and do not routinely collect data on profession.
Asked by: Greg Smith (Conservative - Buckingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to his oral contribution of 17 March 2020, Official Report, column 964, what steps he has taken to ensure that event hire companies receive the full package of financial support under covid-19 emergency measures.
Answered by Kemi Badenoch - President of the Board of Trade
The Government has announced unprecedented support for business and workers to protect them against the current economic emergency. Where they have business premises, event hire companies may benefit from either of the grants schemes announced on 17 March:
In addition to these grants, small businesses, including those in the event hire industry, may be able to benefit from the new Discretionary Grant Fund announced by the Government on 1 May. Government has provided up to an additional £617m for Local Authorities in England to enable them to make grants payments to businesses which are facing high fixed property-related costs, but have been excluded from the existing grants schemes because of the way they are treated by the business rates system. Local Authorities are responsible for defining precise eligibility for these funds, and businesses will need to apply to their Local Authority in order to receive grants. Businesses which think they may be eligible for a discretionary grant should contact their Local Authority.
Businesses not eligible for these grant schemes have access to other support measures the Government has introduced, including:
The Business Support website provides further information about how businesses can access the support that has been made available, who is eligible, when the schemes open and how to apply - https://www.businesssupport.gov.uk/coronavirus-business-support.
Asked by: Greg Smith (Conservative - Buckingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of furloughed employees of small owner limited companies due to the covid-19 outbreak.
Answered by Jesse Norman
Applications for the Coronavirus Job Retention Scheme (CJRS) opened on Monday 20th April.
This is a new scheme and HMRC are currently working through the analysis they will be able to provide based on the data available. HMRC will make the timescales for publication and the types of data available in due course.
Asked by: Greg Smith (Conservative - Buckingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of sole traders who made average profits of between (a) £50,001 and £60,000, (b) £60,001 and £70,000, (c) £70,001 and £80,000 and (d) over £80,000 in the UK over the last three years.
Answered by Jesse Norman
HMRC have examined their data systems and because of the way the data is held, they cannot construct an average of sole trader profits over several years for such a large group within the resource constraints for a Parliamentary Question.
HMRC are using Self-Assessment data to identify those eligible for the Self-Employment Income Support Scheme (SEISS), and aim to contact those eligible by mid-May 2020.
Eligibility for the SEISS is based on average trading profits for sole traders and income from partnerships. More information on the eligibility criteria can be found here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme.
Those with average profits above £50,000 are not eligible for SEISS but could still benefit from other support. The SEISS supplements the significant support already 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: Greg Smith (Conservative - Buckingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the implications for his policy on public sector off-payroll reforms of locum health workers responding to covid-19.
Answered by Jesse Norman
In April 2017, the Government changed the off-payroll working rules for those working in the public sector, shifting responsibility for determining employment status from the worker’s own limited company to the organisation they work for. These existing rules continue to apply.
On 17 March 2020, the Government announced that the reform to the off-payroll working rules that would have applied for people contracting their services to large or medium-sized organisations outside the public sector, as well as engagers in the public sector, will be delayed for one year from 6 April 2020 until 6 April 2021.
This is part of the additional support for businesses and individuals to deal with the economic impacts of COVID-19. This means that the different rules that exist for inside and outside the public sector will continue to apply until 6 April 2021.
The Government remains committed to this policy to ensure that people working like employees, but through their own limited company, pay broadly the same tax as individuals who are employed directly.
Asked by: Greg Smith (Conservative - Buckingham)
Question to the HM Treasury:
What the timeframe is for the review of HMRC's IR35 Tax Regulations.
Answered by Jesse Norman
The Government has announced today further details about the review of the off-payroll working rules reform. As set out at Budget 2018, the reform is due to be extended to all sectors from April 2020. The review will address any remaining concerns from businesses and individuals about how the upcoming reform will be implemented, and will focus on steps the Government can take to ensure smooth and successful implementation. The self-employed are not in scope of the rules; and the review will consider whether any additional support for businesses is needed to ensure that the self-employed are not affected.