Asked by: John McDonnell (Labour - Hayes and Harlington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many enquires were initiated by HM Revenue and Customs Customer Compliance Group in each of the last ten years for which figures are available.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
Compliance checks form one element of HMRC’s broader compliance approach which is increasingly focused on making it easier for customers to get their tax right first time and hard to get it wrong, by investing in its digital systems, simplifying its policies and processes, and improving guidance and support to improve compliance.
The number of compliance checks opened is only one indicator of compliance performance in any year and is not a reliable indicator of compliance activity undertaken or compliance performance when viewed in isolation.
The number of compliance checks opened was not routinely reported prior to 2019-20. From 2020 to 2021, all numbers have been published in the HMRC quarterly performance update here.
Compliance checks may span many years and may range from light-touch single risk checks to complex, multiple risk compliance checks. A compliance check is opened when a risk is opened in a given tax year for a given tax regime.
The number of compliance checks opened and closed by HMRC compliance staff each year will be determined by the risk landscape, its strategic priorities and ministerial commitments.
Asked by: John McDonnell (Labour - Hayes and Harlington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps HM Revenue and Customs has taken to improve tax compliance yield.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The UK tax gap is currently low and stable, falling from 7.5 per cent in 2005 to 2006 to 4.8 per cent in 2021 to 2022.
In 2022 to 2023, compliance action from HMRC secured and protected £34 billion for public services that would otherwise have gone unpaid. 2023 to 2024 compliance yield figures indicate that they are on track to exceed last year’s performance.
HMRC is making it easier for customers to get it right first time and hard to get wrong by investing in digital systems, simplifying policies and processes, and improving guidance and support to improve compliance.
Since 2010, the Government has also introduced over 200 new measures to tackle many different forms of non-compliance. Most recently, at Spring Budget 2024, the government announced a new package of measures to tackle the tax gap, which will raise over £4.5 billion over the next five years.
Asked by: John McDonnell (Labour - Hayes and Harlington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many full time equivalent staff were employed in HM Revenue and Customs Customer Compliance Group for each of the last ten years for which figures are available.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The Government has committed to ensuring HMRC has sufficient funding to maintain its compliance performance over time, while continuing to make efficiencies. Within Customer Compliance Group, staff are deployed across a wide range of compliance risks. Internally, these are usually grouped by customer segment, tax head or specific tax risk being worked.
HMRC publishes information on the amounts spent on compliance by customer segment in our annual report and accounts at Tax by different customer groups – 2022 to 2023 - GOV.UK (www.gov.uk). The information for 2023 to 24 will be available in 2024. HMRC does not release detailed breakdowns of this information for operational reasons.
Asked by: John McDonnell (Labour - Hayes and Harlington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he recused himself from pre-Budget discussions on reducing the higher rate of Capital Gains Tax.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The OBR have confirmed that residential property transactions will be around 60,000 higher over the 5-year forecast, owing to the cut to the higher rate of Capital Gains Tax (CGT) on residential property gains from 28 per cent to 24 per cent.
The published costings note which covers underlying assumptions and methodologies, can be found here:
Further information on the methodology also can be found here:
https://obr.uk/letters-to-john-mcdonnell-mp-and-sir-geoffrey-clifton-brown-mp/
As set out in the Ministerial Code, there is an established process in place for the declaration and management of private interests held by ministers. This process ensures that steps are taken to avoid or mitigate any potential or perceived conflicts of interest. These interests were properly declared in line with ministerial code. The Chancellor has also said: “I’ve decided that when it comes to properties I own, it would be wrong for me to benefit from a direct decision like that. So I will pay tax on the previous rate.”
Asked by: John McDonnell (Labour - Hayes and Harlington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will publish his Department's modelling of the impact of a reduction in the higher rate of Capital Gains Tax on the number of property transactions.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The OBR have confirmed that residential property transactions will be around 60,000 higher over the 5-year forecast, owing to the cut to the higher rate of Capital Gains Tax (CGT) on residential property gains from 28 per cent to 24 per cent.
The published costings note which covers underlying assumptions and methodologies, can be found here:
Further information on the methodology also can be found here:
https://obr.uk/letters-to-john-mcdonnell-mp-and-sir-geoffrey-clifton-brown-mp/
As set out in the Ministerial Code, there is an established process in place for the declaration and management of private interests held by ministers. This process ensures that steps are taken to avoid or mitigate any potential or perceived conflicts of interest. These interests were properly declared in line with ministerial code. The Chancellor has also said: “I’ve decided that when it comes to properties I own, it would be wrong for me to benefit from a direct decision like that. So I will pay tax on the previous rate.”
Asked by: John McDonnell (Labour - Hayes and Harlington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an (a) estimate of the potential costs and (b) assessment of the potential merits of increasing funding for HMRC's compliance functions.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The government regularly reviews the levels of funding provided to HMRC.
The government is committed to tackling tax avoidance, evasion and all other forms of non-compliance. The UK’s tax gap is at an all time low at 4.8 per cent of theoretical tax liabilities in 2021-22, down from 7.5 per-cent in 2005-06. It is amongst the lowest worldwide.
Asked by: John McDonnell (Labour - Hayes and Harlington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential impact on (a) economic growth and (b) inequality of introducing a higher earners minimum tax rate of 35% for people earning over £100,000 a year.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The Government is committed to a fair tax system in which those with the most contribute the most. The income tax system is highly progressive, with different rates of tax sitting above an internationally high Personal Allowance.
The Government keeps tax policy under review and any decisions on future changes will be taken by the Chancellor in the context of the wider public finances.
Asked by: John McDonnell (Labour - Hayes and Harlington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an (a) estimate of the potential costs and (b) assessment of the potential merits of (i) reducing and (ii) removing (a) Business Relief, (B) Agricultural Property Relief and (C) other inheritance tax reliefs.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
HMRC publishes the cost of structural and non-structural tax reliefs. The information is available at www.gov.uk/government/collections/tax-relief-statistics.
Asked by: John McDonnell (Labour - Hayes and Harlington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to lift the freeze on personal tax allowance.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The Government is committed to keeping taxes low to support people to keep more of what they earn. However, the Government must also ensure the UK’s economic stability and provide confidence in the commitment to fiscal discipline. The Chancellor has made clear that the UK’s public finances must be on a sustainable path into the medium term.
Asked by: John McDonnell (Labour - Hayes and Harlington)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential impact of a UK central bank digital currency on the right to privacy.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
Individuals’ privacy, user control and the proper use of data in line with UK data protection laws are of paramount importance to the public, HM Treasury and the Bank of England. The Government recognises the launch of a digital pound would require deep public trust in this new form of money – trust that their money would remain safe, accessible, and private.
The digital pound would be subject to rigorous standards of privacy and data protection. Neither the Government nor the Bank of England would have access to personal data, nor be able to see how consumers use their money. Similarly, the Government and the Bank of England would not put any restrictions on how the public choose to spend digital pounds – users would have complete freedom in how they spent their money.
We consulted on the privacy features of a potential digital pound in February, and we are currently reviewing the feedback received from industry and the general public. We will publish a consultation response publication in due course.