Asked by: Nicola Richards (Conservative - West Bromwich East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what fiscal steps his Department is taking to encourage levelling up across the UK.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Levelling Up White Paper set out a clear plan to level up every corner of the UK by 2030.
The £150m Community Ownership Fund is helping communities across England, Scotland, Wales and Northern Ireland to take ownership of assets at risk of closure.
And we’re continuing to invest billions in regional infrastructure, including £1.7 billion already awarded through the Levelling Up Fund.
Asked by: Nicola Richards (Conservative - West Bromwich East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to tackle financial crime and protect individuals and businesses from fraudulent investment schemes.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The UK has been recognised as world leading in its response to economic crime. Criminals, however, are continuously adapting their methods and we know there is more work to be done to tackle financial crime and fraud.
In 2019, the Government and private sector jointly published a landmark Economic Crime Plan. This Plan provides a collective articulation of 52 actions being taken by both the public and private sectors over the next three years to ensure the UK cannot be abused for economic crime.
The Government has also agreed an ambitious framework for a Fraud Action Plan, covering years 2022 to 2025. This will include the Government working with industry, the intelligence services, law enforcement, and all partners to tackle fraud. The Home Office are developing the Fraud Action Plan and the Government will publish this after this year’s spending review.
Regulation also plays an important part in reducing the risk of fraud to consumers. As part of the Financial Conduct Authority’s (FCA) responsibility to ensure the integrity of UK financial markets, the FCA requires all authorised firms to have systems and controls in place to mitigate the risk that they be used to commit financial crime. Whilst the police have primary responsibility for investigating fraud the FCA also has powers to take a variety of enforcement action against firms that carry out fraudulent activity. The Treasury continues to keep the legislative framework under review to ensure that it is effective in reducing the risk of fraud.
The Government takes fraud very seriously. We continue to work closely with industry to close down the vulnerabilities that fraudsters exploit and ensure members of the public have the information they need to spot a scam and stand up to fraudsters.
Asked by: Nicola Richards (Conservative - West Bromwich East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if his Department will take steps to ensure that an economic impact assessment is conducted before the VAT Retail Export Scheme ceases to be valid in the UK on 1st January 2021.
Answered by Jesse Norman
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 EU residents 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 is also continuing to meet and discuss with 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. A technical note has also been issued to stakeholders to expand on this document and to respond to issues raised by stakeholders.
HMRC estimate that VAT RES refunds cost around £0.5 billion in VAT in 2019 for around 1.2 million 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 £0.9 billion. 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 £1.4 billion 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 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.