Asked by: John Redwood (Conservative - Wokingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of recent trends in the time taken to process applications for new business VAT accounts.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
In July 2022 HMRC came under a significant attack from VAT registration fraudsters and we saw the number of registrations being sent to HMRC increase to unprecedented levels. To deal with this issue a number of measures were urgently put in place to protect genuine customers and to stop the increase in fraudulent activity. These measures entailed additional security checks that meant that some genuine customers were caught in the new processes to ensure the authenticity of the registration being made. HMRC does understand the frustrations from agents and businesses and are working to ensure all genuine registrations are processed as quickly as possible.
Due to the high numbers of new registrations being submitted to HMRC during the summer, we did not always meet our service standard over that time.
HMRC aims to turn around most VAT registrations within 40 working days and is currently meeting that service level agreement, although some cases do take longer due to additional compliance checks or complexity. The average time between registration and opening of new business VAT accounts in 2022 so far is 13 days, and the maximum time has been 291 days.
Asked by: John Redwood (Conservative - Wokingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what was the (a) average and (b) maximum time between initial registration and the opening of a new business VAT account in 2022.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
In July 2022 HMRC came under a significant attack from VAT registration fraudsters and we saw the number of registrations being sent to HMRC increase to unprecedented levels. To deal with this issue a number of measures were urgently put in place to protect genuine customers and to stop the increase in fraudulent activity. These measures entailed additional security checks that meant that some genuine customers were caught in the new processes to ensure the authenticity of the registration being made. HMRC does understand the frustrations from agents and businesses and are working to ensure all genuine registrations are processed as quickly as possible.
Due to the high numbers of new registrations being submitted to HMRC during the summer, we did not always meet our service standard over that time.
HMRC aims to turn around most VAT registrations within 40 working days and is currently meeting that service level agreement, although some cases do take longer due to additional compliance checks or complexity. The average time between registration and opening of new business VAT accounts in 2022 so far is 13 days, and the maximum time has been 291 days.
Asked by: John Redwood (Conservative - Wokingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many people have ceased to be self-employed since the introduction of the 2021 IR 35 rules.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
It is an anticipated outcome of the 2021 off-payroll working (IR35) reform that organisations and contractors will consider the best way for contractors to provide their services, while being compliant with tax legislation.
The Office for National Statistics (ONS) publish data on trends in employment. Dataset A02 NSA provides quarterly estimates of the number of self-employed individuals over the age of 16 for the period sought. On 6 September ONS officials gave evidence to the House of Lords Economic Affairs Committee on changes in the number of individuals self-reporting as self-employed during the relevant period as a part of the committee’s UK Labour Supply Inquiry. That evidence stated that some part of the change in individuals self-reporting as self-employed is due to changes in how people classify themselves, without having changed the way they work.
Asked by: John Redwood (Conservative - Wokingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an estimate of the potential impact of changes in the number of people driving electric, rather than petrol or diesel, vehicles on the amount of fuel duty income that will be received by 2025-26.
Answered by James Cartlidge - Minister of State (Ministry of Defence)
The Office for Budget Responsibility’s latest update of its forecast was published on 17 November 2022. It forecast that fuel duty revenues would amount to £29.5 billion in 2025-26. The forecast can be viewed in full at the following link: https://obr.uk/efo/economic-and-fiscal-outlook-november-2022/
Asked by: John Redwood (Conservative - Wokingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an estimate of the amount of extra tax revenue that would be received in financial year 2022-23 if the GDP of the UK were to remain at its present level, by comparison with the amount he expects to receive in that year according to present forecasts.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Office for Budget Responsibility (OBR) is the UK Government’s independent official forecaster. The OBR’s most recent forecast was published alongside the Autumn Statement on 17 November 2022.
The OBR forecast that tax receipts will increase from £1.0 trillion in 2022-23 to £1.2 trillion in 2027-28, an increase of £196 billion. Debt interest spending (net of the Asset Purchase Facility) is expected to reach £120.4bn for the financial year 2022-23 and fall by £37.9bn to £82.4bn in 2024-25.
The OBR does not regularly produce analysis of tax revenue according to varying paths of GDP. Previous OBR analysis from January 2022 suggests that raising real GDP growth to 2-3% a year over three years, from a base growth forecast of 1.6% per year for those three years, could provide a benefit to the public finances of £10-40 billion through a range of effects across tax and spending.
Asked by: John Redwood (Conservative - Wokingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the potential increase in tax revenue between the 2022-23 and 2027-28 financial years.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Office for Budget Responsibility (OBR) is the UK Government’s independent official forecaster. The OBR’s most recent forecast was published alongside the Autumn Statement on 17 November 2022.
The OBR forecast that tax receipts will increase from £1.0 trillion in 2022-23 to £1.2 trillion in 2027-28, an increase of £196 billion. Debt interest spending (net of the Asset Purchase Facility) is expected to reach £120.4bn for the financial year 2022-23 and fall by £37.9bn to £82.4bn in 2024-25.
The OBR does not regularly produce analysis of tax revenue according to varying paths of GDP. Previous OBR analysis from January 2022 suggests that raising real GDP growth to 2-3% a year over three years, from a base growth forecast of 1.6% per year for those three years, could provide a benefit to the public finances of £10-40 billion through a range of effects across tax and spending.
Asked by: John Redwood (Conservative - Wokingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent estimate he has made of the amount by which the total paid in interest on state debt will change between this year and 2024-5.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Office for Budget Responsibility (OBR) is the UK Government’s independent official forecaster. The OBR’s most recent forecast was published alongside the Autumn Statement on 17 November 2022.
The OBR forecast that tax receipts will increase from £1.0 trillion in 2022-23 to £1.2 trillion in 2027-28, an increase of £196 billion. Debt interest spending (net of the Asset Purchase Facility) is expected to reach £120.4bn for the financial year 2022-23 and fall by £37.9bn to £82.4bn in 2024-25.
The OBR does not regularly produce analysis of tax revenue according to varying paths of GDP. Previous OBR analysis from January 2022 suggests that raising real GDP growth to 2-3% a year over three years, from a base growth forecast of 1.6% per year for those three years, could provide a benefit to the public finances of £10-40 billion through a range of effects across tax and spending.
Asked by: John Redwood (Conservative - Wokingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the (a) windfall tax on oil and gas producer profits and (b) planned increase in corporation tax on the UK's position in global league tables of the best places to do business.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The UK’s oil and gas ring fence tax regime balances attracting investment with ensuring a fair return for the nation.
The Energy Profits Levy is an additional, temporary tax which reflects the extraordinary global context. It will raise around £5 billion over the next year. The OBR will take account of this policy in their next forecast.
The UK’s rate of Corporation Tax is currently 19%.
To balance the need to raise revenue with having an internationally competitive tax system, the Chancellor announced at Spring Budget 2021 that the rate of Corporation Tax would increase to 25% from April 2023, after the point at which the economy is expected to recover to its pre-pandemic level. 25% is the lowest rate of tax in the G7.
Asked by: John Redwood (Conservative - Wokingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent estimate he has made of the difference in tax taken from (a) VAT on fuel, (b) North Sea oil production and profits taxes and (c) all taxes on petrol and diesel sales in 2022 compared with the last Budget forecasts.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
Forecasts for Government tax revenues are provided by the Office for Budget Responsibility (OBR).
Their most recent published forecast, provided for Spring Statement 2022 on 23 March, is available on the OBR website at the following link https://obr.uk/efo/economic-and-fiscal-outlook-march-2022/.
For the financial year 2022-23, Value Added Tax is forecast to be £154.2bn; UK oil and gas revenues are forecast to be £7.8bn; and fuel duty revenues are forecast to be £26.2bn. An updated forecast will be published by the OBR at the next Fiscal Event.
HM Revenue and Customs publishes monthly tax receipts statistics, including for UK oil and gas production, VAT, and fuel duties, on a cash receipts basis, at GOV.UK at the following link https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk.
Asked by: John Redwood (Conservative - Wokingham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what his latest estimate is of the Bank of England's loss on bonds held in the Asset Purchase Facility guaranteed by his Department.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
To date, £120 billion has been transferred to HM Treasury from the Asset Purchase Facility (APF) which has been used to reduce the government’s debt issuance. The size of future cash flows is uncertain and depends on developments in Bank rate, the speed of APF unwind, and the evolution of bond market prices. It is likely that as monetary conditions normalise HM Treasury will make cash transfers to the APF to cover losses.
However, the eventual size of the net payments to or from HMT should not be used as a measure of the success of asset purchases, or of the impact of the scheme on the public sector accounts as a whole. The scheme should instead be judged by the degree to which it helps the Monetary Policy Committee meet its objectives.
In their most recent forecast in March 2022, the Office of Budget Responsibility forecasted net cash transfers from the APF to the Treasury of £3.5bn between 2022-23 and 2026-27.