Asked by: Lyn Brown (Labour - West Ham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many promoters of tax avoidance schemes have been fined for failures to inform their clients that registration under the Disclosure of Tax Avoidance Scheme legislation does not signify that a scheme has been approved by HMRC in each of the last five years.
Answered by Mel Stride - Secretary of State for Work and Pensions
HMRC does not approve tax avoidance schemes.
Promoters are required to give scheme users the tax avoidance ‘Scheme Reference Number (SRN)’ issued by HMRC when an avoidance scheme is disclosed under the Disclosure of Tax Avoidance Scheme (DOTAS). For schemes disclosed since the end of March 2015, which involve employers and their employees, the employer is required to give the SRN to those employees.
The forms that promoters and employers are required to use make it clear to the recipient that they are “involved in a Disclosed Tax Avoidance Scheme” and that the scheme is “not HMRC approved”. They also provide clear information to inform would‑be tax avoiders of the risks they face by using avoidance schemes.
HMRC has no evidence to suggest that promoters and employers are not complying with these obligations.
Asked by: Lyn Brown (Labour - West Ham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many and what proportion people were (a) investigated and (b) prosecuted by HMRC for the (i) promotion and (ii) operation of marketed tax avoidance schemes in relation to activities involving disguised remuneration schemes.
Answered by Mel Stride - Secretary of State for Work and Pensions
HMRC takes tackling promoters of avoidance schemes seriously.
In recent years, HMRC has been investigating over 100 promoters and others involved in avoidance, including disguised remuneration arrangements. In the last year, HMRC has taken litigation action against 5 scheme promoters for failure to disclose under Disclosure of Tax Avoidance Schemes (DOTAS) with others deciding to disclose to avoid litigation. Further cases will be litigated in the year ahead.
HMRC has used its powers under the Promoters of Tax Avoidance Schemes (POTAS) legislation to challenge promoters and made three successful complaints to the Advertising Standards Authority about misleading advertising; two of which relate to disguised remuneration schemes.
HMRC considers criminal investigation and makes referrals to prosecuting authorities, where appropriate. Since the formation of HMRC’s Fraud Investigation Service on 1 April 2016 more than 15 individuals have been convicted for offences relating to arrangements which have been promoted and marketed as tax avoidance schemes and sentenced to over 95 years custodial with an additional 4 years suspended sentences being ordered, additional matters are the subject of ongoing enquiries.
Asked by: Lyn Brown (Labour - West Ham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many people have received a tax avoidance enabler penalty.
Answered by Mel Stride - Secretary of State for Work and Pensions
The enablers penalty applies to those who have enabled newly implemented arrangements after 16 November 2017 which have later been defeated in the courts or by agreement.
HMRC are currently challenging a number of arrangements, seeking to apply penalties at the earliest opportunity under this new legislation.
Asked by: Lyn Brown (Labour - West Ham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the (a) average and (b) total cost to (i) UK B2C digital services exporters that fall below the turnover threshold for VAT registration in relation to cross-border trade in digital services within the EU and (b) other B2C UK services exporters of registration for the non-Union VAT MOSS scheme in an EU Member State in the event that the UK leaves the EU without a deal.
Answered by Mel Stride - Secretary of State for Work and Pensions
The costs to service exporters will depend on the precise circumstances of the exporter in question, including the extent to which they have any VAT liability in the UK or the EU. The UK MOSS scheme costs a participating business around £40 per annum.
Asked by: Lyn Brown (Labour - West Ham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the planned HMRC guidance pack setting out advice for UK businesses on preparations for the UK leaving the EU without a deal, whether that guidance will inform UK business to consumer digital services exporters who fall below the turnover threshold for VAT registration in relation to cross-border trade in digital services within the EU that the new arrangements coming into force as a result of the Value Added Tax (Place of Supply of Services) (Supplies of Electronic, Telecommunication and Broadcasting Services) Order 2018 will no longer apply to them in that scenario.
Answered by Mel Stride - Secretary of State for Work and Pensions
HMRC published a Technical Notice on 23 August 2018 entitled ‘VAT for businesses if there’s no Brexit deal’. The guidance explains the actions businesses will need to take if they want to continue using the Mini One Stop Shop (MOSS) scheme after the UK leaves the EU.
Additional guidance was also sent to all UK users of the VAT MOSS scheme on 27 December 2018 explaining that, should the UK leave the EU without a deal, the threshold will cease to apply to UK businesses.
HMRC will continue to communicate key messages and publish further guidance on the impact of EU exit on VAT and the MOSS scheme to support businesses in preparing for EU exit.
Asked by: Lyn Brown (Labour - West Ham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the planned HMRC guidance pack setting out advice for UK businesses on preparations for the UK leaving the EU without a deal will contain information on the requirement for UK B2C digital services exporters to register for the non-Union VAT MOSS scheme in an EU member state after the day of exit but before the 10th day of the month following a B2C sale into the EU.
Answered by Mel Stride - Secretary of State for Work and Pensions
HMRC published a Technical Notice on 23 August 2018 entitled ‘VAT for businesses if there’s no Brexit deal’. The guidance explains the actions businesses will need to take if they want to continue using the Mini One Stop Shop (MOSS) scheme after the UK leaves the EU.
HMRC will continue to communicate key messages and publish further guidance on the impact of EU exit on the MOSS scheme to support businesses in preparing for EU exit.
Asked by: Lyn Brown (Labour - West Ham)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, if he will make an assessment of the effect on small and medium-sized businesses of changes in the costs of importing goods into the UK in the event that the UK leaves the EU customs union on 29 March 2019.
Answered by Mel Stride - Secretary of State for Work and Pensions
The Government has been clear that, as we leave the EU, we will also leave the EU customs union. Future customs arrangements are dependent on the outcome of the negotiations with the EU. The Government is engaging with businesses, including small and medium-sized enterprises, in every sector and region of the UK economy to assess the effect of EU Exit on them.Asked by: Lyn Brown (Labour - West Ham)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, if he will estimate the cost to the public purse in (a) 2019-2020, (b) 2020-2021 and (c) 2021-2022 of implementing a system of payments of upfront VAT by companies when importing goods into the UK from the EU in the event that the UK leaves the EU VAT area on 29 March 2019.
Answered by Mel Stride - Secretary of State for Work and Pensions
The Government recognises the importance of VAT accounting treatment to business, and is exploring options to mitigate any cash-flow impacts for business as a result of potential changes following EU exit. The Government’s aim is to keep VAT processes as close as possible to what they are now.
Asked by: Lyn Brown (Labour - West Ham)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, if he will make an assessment of the effect on small and medium-sized businesses of implementing a system of payments of upfront VAT by companies when importing goods into the UK from the EU in the event that the UK leaves the EU VAT area on 29 March 2019.
Answered by Mel Stride - Secretary of State for Work and Pensions
The Government recognises the importance of VAT accounting treatment to business, and is exploring options to mitigate any cash-flow impacts for business as a result of potential changes following EU exit. The Government’s aim is to keep VAT processes as close as possible to what they are now.
Asked by: Lyn Brown (Labour - West Ham)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, how many companies will be liable for payments of upfront VAT at the point of importation of goods into the UK if the UK leaves the EU VAT area.
Answered by Mel Stride - Secretary of State for Work and Pensions
The Government recognises the importance of VAT accounting treatment to business, and is exploring options to mitigate any cash-flow impacts for business as a result of potential changes following EU exit. The Government’s aim is to keep VAT processes as close as possible to what they are now.