Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what legal advice his Department received that supports HMRC pursuing employees not employers for the use of loan schemes.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Loan Charge was announced at Budget 2016 as part of a package of measures to tackle Disguised Remuneration (DR) tax avoidance. The forecast was last revised at Spring Budget 2021. There was an estimated overall Exchequer yield of £3.3 billion for the entire package, including the Loan Charge.
In September 2019, the Government commissioned an Independent Review into the Loan Charge which was led by Lord Morse. The Government accepted 19 of the 20 recommendations made by the review. Changes to the Loan Charge were estimated to reduce the forecast yield. At Budget 2020, the changes were costed as a separate measure, with an estimated reduction to the Exchequer yield of £745 million.
HMRC will go to the employer to settle the tax due or collect the Loan Charge in the first instance. Approximately 80 per cent of the £3.3 billion HMRC brought into charge through DR settlements between Budget 2016 and the end of March 2021 was from employers.
However, HMRC will consider other options to collect the tax when collection from the employer is not possible, such as when the employer no longer exists or is based offshore. Liability for the tax is always that of the individual, and the requirement for an employer to account for PAYE does not supersede or remove this liability. Parliament has provided a range of powers allowing HMRC, in certain circumstances, to collect the amount due from the employee.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the total amount of revenue that will be raised by the loan charge.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Loan Charge was announced at Budget 2016 as part of a package of measures to tackle Disguised Remuneration (DR) tax avoidance. The forecast was last revised at Spring Budget 2021. There was an estimated overall Exchequer yield of £3.3 billion for the entire package, including the Loan Charge.
In September 2019, the Government commissioned an Independent Review into the Loan Charge which was led by Lord Morse. The Government accepted 19 of the 20 recommendations made by the review. Changes to the Loan Charge were estimated to reduce the forecast yield. At Budget 2020, the changes were costed as a separate measure, with an estimated reduction to the Exchequer yield of £745 million.
HMRC will go to the employer to settle the tax due or collect the Loan Charge in the first instance. Approximately 80 per cent of the £3.3 billion HMRC brought into charge through DR settlements between Budget 2016 and the end of March 2021 was from employers.
However, HMRC will consider other options to collect the tax when collection from the employer is not possible, such as when the employer no longer exists or is based offshore. Liability for the tax is always that of the individual, and the requirement for an employer to account for PAYE does not supersede or remove this liability. Parliament has provided a range of powers allowing HMRC, in certain circumstances, to collect the amount due from the employee.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has made an assessment of the potential merits of (a) waiving or (b) reducing taxes on Self-Employment Income Support Scheme grants for people facing difficulties in paying them.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Government has supported UK households throughout the pandemic with nearly £400 billion of COVID support, including through the Self-Employment Income Support Scheme (SEISS) which provided over £28 billion in grants to 2.9 million individuals.
The Government does not think it is right to allow SEISS recipients to alter the rate of tax paid on that income over time. When announcing the scheme on 26 March 2020, and in subsequent SEISS guidance throughout the life of the scheme, the Chancellor set out that these grants are taxable: https://www.gov.uk/government/speeches/chancellor-outlines-new-coronavirus-support-measures-for-the-self-employed
The SEISS was designed to support those whose income had dropped temporarily due to COVID-19. Like self-employed income, SEISS grant payments are subject to Income Tax and self-employed National Insurance contributions at the recipient’s rate of Income Tax in the year they were received. This ensures fairness for recipients of support across various schemes, and for the taxpayers who are funding the schemes. Taxes help to fund public services from which we all benefit, such as the NHS.
The Government has implemented an unprecedented package of support for taxpayers struggling with paying tax liabilities. HMRC has scaled up its longstanding Time to Pay policy, which allows any business or individual in temporary financial difficulty to schedule their tax debts into affordable, sustainable, and tailored instalment arrangements. Anyone experiencing difficulties paying their tax bill can discuss payment options with HMRC. HMRC are committed to supporting taxpayers through difficult times and will do everything possible to help. There are further details available on GOV.UK or by calling the Self-Assessment payment helpline.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what further steps he plans to take to support people in receipt of Self-Employment Income Support Scheme grants who are facing difficulties in paying their taxes.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Government has supported UK households throughout the pandemic with nearly £400 billion of COVID support, including through the Self-Employment Income Support Scheme (SEISS) which provided over £28 billion in grants to 2.9 million individuals.
The Government does not think it is right to allow SEISS recipients to alter the rate of tax paid on that income over time. When announcing the scheme on 26 March 2020, and in subsequent SEISS guidance throughout the life of the scheme, the Chancellor set out that these grants are taxable: https://www.gov.uk/government/speeches/chancellor-outlines-new-coronavirus-support-measures-for-the-self-employed
The SEISS was designed to support those whose income had dropped temporarily due to COVID-19. Like self-employed income, SEISS grant payments are subject to Income Tax and self-employed National Insurance contributions at the recipient’s rate of Income Tax in the year they were received. This ensures fairness for recipients of support across various schemes, and for the taxpayers who are funding the schemes. Taxes help to fund public services from which we all benefit, such as the NHS.
The Government has implemented an unprecedented package of support for taxpayers struggling with paying tax liabilities. HMRC has scaled up its longstanding Time to Pay policy, which allows any business or individual in temporary financial difficulty to schedule their tax debts into affordable, sustainable, and tailored instalment arrangements. Anyone experiencing difficulties paying their tax bill can discuss payment options with HMRC. HMRC are committed to supporting taxpayers through difficult times and will do everything possible to help. There are further details available on GOV.UK or by calling the Self-Assessment payment helpline.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will (a) review his policy on payments made under the Self Employment Income Support Scheme in order to discount average trading profits in the preceding three full tax years that were reduced as a result a self-employed woman having taken maternity leave and (b) make retrospective payments to affected women based on that revised calculation.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
Under the Self-Employment Income Support Scheme (SEISS), the Government has been able to support millions of self-employed people at scale and pace, making it one of the most generous self-employment income COVID support schemes in the world. The SEISS grant was based on data HMRC already held and could quickly and easily calculate at scale. Without this mechanism, the schemes might have run into unacceptable delay, created unmanageable manual demand, or exposed the support to fraud.
There is no way for HMRC to know the reasons why an individual’s profits may have dropped in earlier years from income tax self-assessment returns. However, by calculating the grant on average trading profits over several tax years, the SEISS supported people who saw a dip in profits for any reason.
The Government’s approach made the scheme as accessible and fair as possible, while ensuring it remained deliverable and achieved its objectives.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department has taken to conduct equalities impact assessments on its policies.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Treasury carefully considers the equalities impacts of its fiscal decisions on those with protected characteristics, in line with both its legal obligations and with its strong commitment to promoting fairness.
The Treasury has rigorous processes in place to ensure that it complies with its legal requirements under the Public Sector Equality Duty (PSED) in the Equality Act 2010. Every policy is different, so the level of work will vary accordingly. What matters is that equality considerations are placed side-by-side with all other pressing circumstances.
In interests of transparency, the Treasury has published an equalities impacts in summary form for tax and welfare measures in Tax Information and Impact Notes (TIINs). We have also published an Equalities Annex alongside other documentation for the Budget and Spending Review 2021, which provides illustrative examples of what the Treasury is doing for those with protected characteristics.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to ensure that its policies do not discriminate against (a) new mothers and (b) pregnant women.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Treasury carefully considers the equalities impacts of policies on individuals with protected characteristics, in line with both its legal obligations and its commitment to fairness and equality of opportunity.
Under the Equality Act 2010, pregnancy and maternity is one of a number of protected characteristics covered by the Public Sector Equality Duty which requires ministers and others to pay due regard to the need to eliminate unlawful discrimination.
Our policies support the Government’s ambition of creating a fairer and more equal society. For example, at the Autumn Budget, the Government announced £500m funding to transform start for life and family help services for parents and babies, and carers and children, including mothers during pregnancy and maternity, in half of the council areas across England.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to support the brewing sector.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Government is continuing to monitor the economic impact of covid-19 on the brewing sector and is taking steps to support pubs and brewers in their recovery.
As announced at Autumn Budget, the duty rates on alcohol including beer will be frozen for another year. This is expected to save beer drinkers £900 million over the next five years, and has resulted in beer duty rates being at their lowest level in real terms since the 1990s.
In addition, as part of our alcohol duty review, the Government has announced a number of reforms which will further support brewers. This includes our proposal to widen the reduced rate for lower strength beers from 2.8% alcohol by volume (ABV) to extend to beers below 3.5% ABV, and to move the higher rate for beers above 7.5% ABV to start at 8.5% ABV.
The Government has also announced it will reduce the duty on draught beer by 5% from 2023. This will cut the duty on a pint of beer served in a pub by 3p.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the economic impact of covid-19 on the brewing sector.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Government is continuing to monitor the economic impact of covid-19 on the brewing sector and is taking steps to support pubs and brewers in their recovery.
As announced at Autumn Budget, the duty rates on alcohol including beer will be frozen for another year. This is expected to save beer drinkers £900 million over the next five years, and has resulted in beer duty rates being at their lowest level in real terms since the 1990s.
In addition, as part of our alcohol duty review, the Government has announced a number of reforms which will further support brewers. This includes our proposal to widen the reduced rate for lower strength beers from 2.8% alcohol by volume (ABV) to extend to beers below 3.5% ABV, and to move the higher rate for beers above 7.5% ABV to start at 8.5% ABV.
The Government has also announced it will reduce the duty on draught beer by 5% from 2023. This will cut the duty on a pint of beer served in a pub by 3p.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has commissioned research within his Department on the potential effect of the rise in Employer National Insurance Contributions on (a) the employment rate and (b) wages.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Office for Budget Responsibility set out their assessment of the economic effects of the Health and Social Care Levy on the UK economy, including the impact on labour supply and wages, in their latest Economic and Fiscal Outlook. This can be found here: https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/