Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of extending the 12.5 per cent hospitality VAT rate to the end of 2022.
Answered by Lucy Frazer
The temporary reduced rate of VAT was introduced on 15 July 2020 to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs in the hospitality and tourism sectors. As announced at Spring Budget 2021, the Government extended the 5 per cent temporary reduced rate of VAT for the tourism and hospitality sectors until the end of September 2021. On 1 October 2021, a new reduced rate of 12.5 per cent was introduced for these goods and services to help ease affected businesses back to the standard rate. The sector can continue to benefit from this relief until 31 March 2022.
The Government has been clear that the reduced rate of VAT for tourism and hospitality is a temporary measure designed to support the sectors that have been severely affected by COVID-19. It is appropriate that as restrictions are lifted and demand for goods and services in these sectors increases, the temporary tax reliefs are first reduced, and then removed, in order to rebuild and strengthen the public finances.
This relief has cost over £8 billion and, whilst all taxes are kept under review, there are no plans to extend the 12.5 per cent reduced rate of VAT.
Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to ensure that NHS doctors will not incur increased tax liabilities due to pension contributions with the result that they would be financially worse off for working longer hours.
Answered by John Glen
The Government increased in April 2020 the thresholds for the calculation of the tapered annual allowance in pensions tax by £90,000 to support delivery across public services, and in particular the NHS. Raising the tapered annual allowance thresholds means that no-one with a net income before tax below £200,000 is now affected by the tapered annual allowance. It was estimated that this would take up to 96% of GPs and up to 98% of NHS consultants outside the scope of the tapered annual allowance.
This allows savers to continue to make significant amounts of pension savings tax-free, while ensuring incentives to save are targeted across society.
Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of increasing the lifetime ISA property limit in line with inflation.
Answered by John Glen
The Lifetime ISA is intended to support younger people saving for their first home or for later life by offering a generous government bonus of 25% on up to £4,000 of savings each year. These funds, including the government bonus, can be used to purchase a first home up to the value of £450,000.
The Government considers that the £450,000 price cap is suitable to support the majority of first-time buyers across the UK, who typically purchase less expensive properties than other buyers, while ensuring sustainable public finances. The most recent Office for Budget Responsibility forecast stated that bonus payments will have an exchequer cost of £3.7 billion between 2021 and 2027. The price cap ensures that this significant investment of public money is more precisely targeted towards households that may find it more difficult to get onto the property ladder.
First-time buyers who can purchase a home valued over £450,000 are likely to have an income significantly above that of the average household in the UK and are therefore more likely to be able to purchase a first home without the support of this scheme.
However, the Government continues to keep all aspects of savings policy under review.
Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to provide support to young families saving to buy their first home.
Answered by John Glen
The Government is committed to supporting people of all incomes and at all stages of life to save, particularly younger individuals and families saving for their first home, through a programme of ‘own your home’ schemes. The following schemes are part of a package of measures to help people to save for their first house deposit and increase the supply of low-deposit mortgages for credit-worthy households.
The Help to Buy: Equity Loan is available to all those who aspire to own a new build home, but struggle to access or afford the repayments on a low deposit mortgage. Under this part of the scheme the government provides an equity loan worth up to 20 per cent of the value of a new build home, interest free for the first five years. The equity loan must be paid back to the government on sale, or when the mortgage is repaid. This scheme has been extended to run until March 2023.
In 2017, the government launched the Lifetime ISA (LISA) to support younger people saving for a first home or later life. Adults under 40 can open a LISA and save up to £4,000 each year until they turn 50. The government provides a generous 25 per cent bonus on all LISA contributions within these limits. These funds, including the government bonus, can be used as a deposit to purchase a first home up to the value of £450,000.
First-time buyers can similarly continue to save through a Help to Buy: ISA (now closed to new accounts) when saving to get onto the property ladder. The Government provides a 25 per cent bonus based on the account holder’s balance with a maximum bonus value of £3,000. Those participating into the scheme can continue saving into their account until November 2029 and have until December 2030 to claim their bonus.
In response to the reduced availability of 95% Loan To Value (LTV) mortgages following the pandemic, the Government launched the mortgage guarantee scheme in April 2021 to reinstate the market for 95% LTV products and to support households who struggle to get a mortgage because of the very large deposits required by lenders but who can afford the mortgage repayments with a 5% deposit.
The full list of Government schemes to help people own their own home is available here: https://www.ownyourhome.gov.uk/
Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will publish an impact assessment on the potential economic effect of ending the reduced rate of VAT for (a) hospitality and (b) tourism businesses on (i) jobs and (ii) businesses in those sectors.
Answered by Lucy Frazer
The temporary reduced rate of VAT was introduced on 15 July 2020 to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs in the hospitality and tourism sectors. As announced at Spring Budget 2021, the Government extended the 5 per cent temporary reduced rate of VAT for the tourism and hospitality sectors until the end of September 2021. On 1 October 2021, a new reduced rate of 12.5 per cent was introduced for these goods and services to help ease affected businesses back to the standard rate. This new rate will end on 31 March 2022.
This relief has cost over £8 billion and, whilst all taxes are kept under review, there are no plans to extend the 12.5 per cent reduced rate of VAT. The Government has been clear that this relief is a temporary measure designed to support the sectors that have been severely affected by COVID-19. It is appropriate that as restrictions are lifted and demand for goods and services in these sectors increases the temporary tax reliefs are first reduced, and then removed, in order to rebuild and strengthen the public finances.
Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of enabling energy consumers to opt-out of the energy bills rebate scheme.
Answered by Helen Whately - Shadow Secretary of State for Work and Pensions
All domestic electricity customers in Great Britain will receive a £200 reduction in their electricity costs from this October. This will be delivered via energy suppliers and will be clearly identifiable as a line item on electricity bills.
This will help people with the increase in energy bills by spreading the increased costs over a few years, so they are more manageable for households.
The energy bill reduction is not a loan – there is no interest due on it, no debt attached to it, and it will not affect your credit rating.
Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will publish an impact assessment on the effect of ending the reduced rate of VAT on (a) jobs and (b) businesses in the hospitality sector.
Answered by Lucy Frazer
The temporary reduced rate of VAT was introduced on 15 July 2020 to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs in the hospitality and tourism sectors. As announced at Spring Budget 2021, the Government extended the 5 per cent temporary reduced rate of VAT for the tourism and hospitality sectors until the end of September 2021. On 1 October 2021, a new reduced rate of 12.5 per cent was introduced for these goods and services to help ease affected businesses back to the standard rate. This new rate will end on 31 March 2022.
This relief has cost over £8 billion and, whilst all taxes are kept under review, there are no plans to extend the 12.5 per cent reduced rate of VAT. The Government has been clear that this relief is a temporary measure designed to support the sectors that have been severely affected by COVID-19. It is appropriate that as restrictions are lifted and demand for goods and services in these sectors increases the temporary tax reliefs are first reduced, and then removed, in order to rebuild and strengthen the public finances.
Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the adequacy of the level of taxation on (a) purchasing, (b) selling and (c) trading of cryptocurrencies in the UK.
Answered by John Glen
The Government established a Cryptoassets Taskforce in 2018, consisting of HM Treasury, the Bank of England and the Financial Conduct Authority (FCA). The Cryptoasset Taskforce is responsible for assessing developments in the cryptoasset market, and deciding what, if any, regulation is required in response.
HM Treasury and UK authorities have taken a series of actions to support innovation while mitigating risks to stability and market integrity. These include launching a new anti-money laundering and counter-terrorist financing regime for cryptoassets in 2020; and consulting on a proposal to ensure cryptoassets known as ‘stablecoins’ meet the same high standards expected of other payment methods. The Government will issue its response to this consultation shortly. On 18 January 2022, the Government announced its intention to legislate later this year to bring certain cryptoassets into the scope of financial promotions regulation, requiring them to be fair, clear and not misleading. This is aimed at improving consumers’ understanding of the risks and benefits associated with cryptoasset purchases, and ensuring that cryptoasset promotions are held to the same high standards as broader financial services products.
Profits from trading in and gains from disposing of cryptoassets are taxed in the same way and at the same rate as those from other assets. HMRC’s Cryptoassets Manual, one the most detailed publications from any tax administration, explains the tax consequences of different types of transactions involving cryptoassets for both businesses accepting them and individuals using them.
Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the adequacy of the current (a) rules and (b) regulations governing the (i) buying and (ii) selling of cryptocurrencies in the UK.
Answered by John Glen
The Government established a Cryptoassets Taskforce in 2018, consisting of HM Treasury, the Bank of England and the Financial Conduct Authority (FCA). The Cryptoasset Taskforce is responsible for assessing developments in the cryptoasset market, and deciding what, if any, regulation is required in response.
HM Treasury and UK authorities have taken a series of actions to support innovation while mitigating risks to stability and market integrity. These include launching a new anti-money laundering and counter-terrorist financing regime for cryptoassets in 2020; and consulting on a proposal to ensure cryptoassets known as ‘stablecoins’ meet the same high standards expected of other payment methods. The Government will issue its response to this consultation shortly. On 18 January 2022, the Government announced its intention to legislate later this year to bring certain cryptoassets into the scope of financial promotions regulation, requiring them to be fair, clear and not misleading. This is aimed at improving consumers’ understanding of the risks and benefits associated with cryptoasset purchases, and ensuring that cryptoasset promotions are held to the same high standards as broader financial services products.
Profits from trading in and gains from disposing of cryptoassets are taxed in the same way and at the same rate as those from other assets. HMRC’s Cryptoassets Manual, one the most detailed publications from any tax administration, explains the tax consequences of different types of transactions involving cryptoassets for both businesses accepting them and individuals using them.
Asked by: Rupa Huq (Labour - Ealing Central and Acton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the potential merits of delivering targeted support for creative freelancers, via grant funding, to include (a) newly self-employed people, (b) people with less than 50 per cent of their income from self-employment, (c) PAYE freelancers and (d) limited company directors.
Answered by Helen Whately - Shadow Secretary of State for Work and Pensions
The government has provided around £400 billion of direct support for the economy through the pandemic to date, which has helped to safeguard livelihoods and public services in every region and nation of the UK.
The government recognises the impact Omicron is having on businesses and individuals, which is why we announced £1 billion of targeted financial grant support for the hospitality, leisure and cultural sectors to protect jobs and businesses.
The package includes £30 million which will be made available through the Culture Recovery Fund (CRF), to support theatres, museums and other vital cultural institutions through the temporary disruption this winter, helping in turn to support the livelihoods of those working in this sector.
In addition to the CRF, government funding via Arts Council England will also provide an immediate £1.5 million to support freelancers affected by the pandemic, alongside a further £1.35 million contribution from the theatre sector. This will provide grants of £650,000 each directly to the Theatre Artists Fund, Help Musicians, and £200,000 to a-n the Artists Information Company, a charity for visual artists which will distribute cash to freelancers over the coming weeks.
The government is also waiving late filing and late payment penalties for Income Tax Self-Assessment (ITSA) taxpayers to support cashflow and ease administrative burdens. Self-Assessment taxpayers with up to £30,000 of tax debt can spread their tax payments online, through HMRC’s “time to pay” service, and all others can call HMRC to arrange a repayment plan. For those on low income whose earnings continue to be affected by Covid-19 restrictions, work coaches will continue to be able to suspend the Universal Credit Minimum Income Floor on an individual basis for up to six months.