Asked by: Priti Patel (Conservative - Witham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the statement on Net zero by the Prime Minister on 20 September 2023, whether he plans to amend air passenger duty rates.
Answered by Gareth Davies - Shadow Minister (Business and Trade)
Air Passenger Duty (APD) is the Government’s principal tax on the aviation sector, since tickets are VAT free and aviation fuel incurs no duty. Its primary objective is to ensure that airlines make a fair contribution to the public finances.
As with all taxes, the Government keeps the rates of APD under review and any changes are announced by the Chancellor at fiscal events.
Asked by: Priti Patel (Conservative - Witham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what progress he has made on implementation of OECD Pillar 2 on corporation tax; and if he will make an assessment of the potential economic impact of that implementation.
Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs
The government has legislated for the Pillar 2 Multinational top-up tax (MTT) and Domestic top-up tax (DTT) for implementation from 31 December 2023.
An updated Tax Impact and Information Note and costing were published at Spring Budget 2023. An update on the latest revenue forecast from the OBR and a status update on international implementation will be provided at Autumn Statement 2023.
Asked by: Priti Patel (Conservative - Witham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential economic merits of (a) freezing and (b) reducing fuel duty.
Answered by James Cartlidge - Shadow Secretary of State for Defence
In response to high fuel prices, the Government announced at Spring Statement 2022 a temporary 12-month cut to duty on petrol and diesel of 5p per litre. This is the largest cash-terms cut across all fuel duty rates at once, ever, and is only the second time in 20 years that main rates of petrol and diesel have been cut. This represents a tax cut worth around £2.4 billion in 2022-23, benefiting anyone who consumes fuel across the UK
The Government will confirm future policy on fuel duty in the Budget in the Spring, as has been the case in previous years.
Asked by: Priti Patel (Conservative - Witham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what additional funding will be required by (a) his Department and (b) the OECD to ensure monitoring and compliance with the proposed Pillar 2 rules of BEPS 2.0.
Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs
At Autumn Statement 2022, the Government set out that Pillar 2 will raise £2.3 billion a year by 2027-28.
An estimate of HMRC operational costs to implement Pillar 2 was published in a tax information and impact note in July 2022. This can be accessed on GOV.UK at https://www.gov.uk/government/publications/introduction-of-the-new-multinational-top-up-tax/multinational-top-up-tax-uk-adoption-of-organisation-for-economic-co-operation-and-development-pillar-2
The Government will publish an updated tax information and impact note at the Spring Budget.
Asked by: Priti Patel (Conservative - Witham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether a disputes resolution mechanism agreed as part of the Organisation for Economic Cooperation and Development’s BEPS 2.0 Pillar 2 proposals would be binding upon UK courts.
Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs
The Organisation for Economic Cooperation and Development (OECD) is publicly consulting on tax certainty in the pillar 2 rules, covering dispute prevention and dispute resolution mechanisms, until 3 February 2023. This includes options for legal instruments to implement the dispute resolution process.
The public consultation can be accessed online at https://www.oecd.org/tax/beps/oecd-invites-comments-on-compliance-and-tax-certainty-aspects-of-global-minimum-tax.htm.
Asked by: Priti Patel (Conservative - Witham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will publish the most recent version of the agreement on the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting framework.
Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs
The UK is a member of the Organisation for Economic Cooperation and Development (OECD)/Group of Twenty (G20) Inclusive Framework on Base Erosion and Profit Shifting (BEPS), which is collaborating on 15 actions to address tax avoidance.
The OECD sets out the 15 BEPS actions at https://www.oecd.org/tax/beps/beps-actions/.
The recent focus of developments in international tax has been the Two-Pillar Solution to address the tax challenges arising from the digitalisation of the economy.
The OECD published the two-pillar agreement in 2021, so far signed by 138 countries including the UK, which can be accessed at https://www.oecd.org/tax/beps/statement-on-a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-october-2021.htm.
Asked by: Priti Patel (Conservative - Witham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to hold a formal public consultation before bringing forward legislative proposals to implement the Organisation for Economic Co-operation and Development’s base Erosion and Profit Shifting framework.
Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs
As part of the tax policy making process, the Government routinely holds public consultations on tax policy ahead of implementation.
Since international agreement on the BEPS project in 2015, the Government has consulted ahead of the introduction of new rules in accordance with the BEPS actions. This includes on hybrid mismatch rules, the tax deductibility on corporate interest expense and country by country reporting.
The Government has recently demonstrated its commitment to consultation. In 2022, the Government consulted on the implementation of Pillar 2 in the UK and published a response in July 2022 which can be accessed on gov.uk at https://www.gov.uk/government/consultations/oecd-pillar-2-consultation-on-implementation.
In July 2022, the Government also led a technical consultation on Income Inclusion Rule draft legislation published on gov.uk at https://www.gov.uk/government/publications/introduction-of-the-new-multinational-top-up-tax.
Following consultation, the Government confirmed at Autumn Statement 2022 that it will implement the OECD Pillar 2 rules for accounting periods beginning on or after 31 December 2023.
Asked by: Priti Patel (Conservative - Witham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what consideration he has given to increasing the (a) mileage rate and (b) 10,000 mile threshold of the Mileage Allowance Payments available to businesses; and what assessment he has made of the potential benefit to (i) businesses; (ii) employees; and (iii) the self-employed of increasing mileage allowance payments.
Answered by James Cartlidge - Shadow Secretary of State for Defence
Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse an employee’s expenses for business mileage in their private vehicle.
The government sets the AMAP rates to minimise administrative burdens.
Employees can claim up to 45p per mile for the first 10,000 miles and the 25p per mile for subsequent miles. The mileage thresholds reflect that the AMAP rates are designed to cover both a proportion of fixed costs, such as insurance and VED, as well as ongoing costs such as fuel.
Employers are not required to use the AMAPs rates. Instead, they can agree to reimburse a different amount that better reflects their employees’ circumstances. If an employee is paid less than the AMAP rate, they can claim Mileage Allowance Relief (MAR) on the shortfall. However, where payments exceed the relevant AMAP rate, there may be a tax and National Insurance charge on the difference.
Self-employed people can choose to use the simplified mileage rate, or they can claim tax relief using capital allowances and actual expenses.
As with all taxes, the Government keeps the AMAP rate under review and any changes are considered and announced at fiscal events.