Asked by: Vicky Foxcroft (Labour - Lewisham North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps the Government is taking to support self-employed people who are registered via limited companies.
Answered by Jesse Norman - Shadow Leader of the House of Commons
Those who pay themselves a salary through their own company may be eligible to claim for 80% of usual monthly wage costs, up to £2,500 a month, through the Coronavirus Job Retention Scheme (CJRS). The CJRS is available to employers, including personal service companies, and individuals paying themselves a salary through a PAYE scheme are eligible.
Income from dividends is a return on investment in the company, rather than wages, and is not eligible for support. Under current reporting mechanisms it is not possible for HM Revenue and Customs to distinguish between dividends derived from an individual’s own company and dividends from other sources, and between dividends in lieu of employment income and as returns from other corporate activity. Expanding the scope would require HMRC to collect and verify new information. This would take longer to deliver and put at risk the other schemes which the Government is committed to delivering as quickly as possible.
Individuals who are not eligible for the Coronavirus Job Retention Scheme might be able to access the other support Government is providing, including the Coronavirus Business Interruption Loan Scheme and the deferral of tax payments. More information about the full range of business support measures is available at?www.businesssupport.gov.uk/coronavirus-business-support/
Asked by: Vicky Foxcroft (Labour - Lewisham North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps the Government is taking to support people that have recently started their job, and were not on their employer's PAYE payroll on 28 February 2020, and are therefore not eligible for the Coronavirus Job Retention Scheme.
Answered by Jesse Norman - Shadow Leader of the House of Commons
On 15 April, the Government announced it would extend the cut-off date for the CJRS to 19 March, to include employees whose payroll information was notified to HMRC by 19 March. Processing claims for the Coronavirus Job Retention Scheme in cases where HMRC did not have RTI data by 19 March would require much greater manual handling by HMRC, which would significantly slow down the system while risking substantial levels of fraud. It would also require greater resource for HMRC when they are already under significant pressure to deliver the system designed. Those not eligible for the scheme may be able to access the other support Government is providing, including a package of temporary welfare measures and up to three months’ mortgage payment holidays for those struggling with their mortgage payments.
Asked by: Vicky Foxcroft (Labour - Lewisham North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has plans to provide financial support to self-employed people that earn up to £60,000 a year and are therefore not eligible for the covid-19 Self Employed Income Support Scheme.
Answered by Jesse Norman - Shadow Leader of the House of Commons
Some 95% of people who receive the majority of their income from self-employment should be eligible to benefit from the Self-Employment Income Support Scheme (SEISS). The scheme, including the £50,000 threshold, is designed to ensure it is targeted at those who need it most, and who are most reliant on their self-employment income.
Those with average profits above £50,000 could still benefit from other support. Individuals may have access to a range of grants and loans depending on their circumstances. The SEISS supplements the significant support already announced for UK businesses, including the Coronavirus Business Interruption Loan Scheme and the deferral of tax payments. More information about the full range of business support measures is available at www.businesssupport.gov.uk/coronavirus-business-support/.
Asked by: Vicky Foxcroft (Labour - Lewisham North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to extend financial support for the self-employed to include people that make contributions through PAYE.
Answered by Jesse Norman - Shadow Leader of the House of Commons
The Self-Employment Income Support Scheme provides support for eligible individuals with trading profits. These profits are reported on Self-Assessment tax returns.
Employers paying individuals through PAYE can access the Coronavirus Job Retention Scheme. This also applies to salaried individuals who are directors of their own company.
The self-employed can also access a wide range of other financial support, and more information is available at www.businesssupport.gov.uk/coronavirus-business-support/.
Asked by: Vicky Foxcroft (Labour - Lewisham North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he plans to take to support people that are recently self-employed and did not submit a self assessment tax return for the tax year 2018-19 under the Government’s Self-employment Income Support Scheme.
Answered by Jesse Norman - Shadow Leader of the House of Commons
It has not been possible to include those who began trading after the 2018-19 tax year in the Self-Employment Income Support Scheme. This was a very difficult decision and it was taken for practical reasons. It is correct that individuals can now submit Income Tax Self Assessment returns for 2019-20, but there would be significant risks for the public purse if the Government relied on these returns for the scheme. HMRC would not be able to distinguish genuine self-employed individuals who started trading in 2019-20 from fake applications by fraudulent operators and organised criminal gangs seeking to exploit the SEISS. The Government cannot expose the tax system to these risks.
However, those who entered self-employment after April 2019 may still be eligible for other support. For example, the self-employed can benefit from the Government’s relaxation of the earnings rules (known as the Minimum Income Floor) in Universal Credit. Individuals may also have access to a range of grants and loans depending on their circumstances, including the Coronavirus Business Interruption Loan Scheme and the deferral of tax payments. More information about the full range of business support measures is available at www.businesssupport.gov.uk/coronavirus-business-support/.
Asked by: Vicky Foxcroft (Labour - Lewisham North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of relaxing the ring-fenced budgets for the National Citizen Service for Supplementary Estimates 2019-20.
Answered by Rishi Sunak
As part of Spending Review settlements, some spending is subject to specific policy ring-fences. If so, departments may not move money across the ring-fence, except as specified in the Spending Review settlement. The budgets for the National Citizen Service are subject to such a policy ring-fence. Her Majesty’s Treasury keeps all such ring-fences under review.
Asked by: Vicky Foxcroft (Labour - Lewisham North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what progress he has made on drafting the 2019 spending review.
Answered by Elizabeth Truss
As the Chancellor announced at Spring Statement, if a deal with the EU is agreed in the coming weeks, the 2019 Spending Review will be launched before summer recess and conclude alongside an Autumn Budget.
Asked by: Vicky Foxcroft (Labour - Lewisham North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what provision has been made to ensure that disguised remuneration scheme providers are liable for the tax on fees taken from each individual’s income during that scheme's operation.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
This Government is committed to tackling all forms of avoidance. HM Revenue and Customs (HMRC) has a suite of powers to tackle and challenge those who promote or otherwise enable tax avoidance and HMRC is using its powers to challenge major promoters of avoidance schemes, including disguised remuneration (DR) avoidance schemes.
Fees earned by promoters of tax avoidance form part of their business income on which tax has to be paid. Promoters are subject to compliance checks as any other individual or business to ensure they are paying the correct amount of tax due.
Since 2014, HMRC has accelerated its efforts to tackle and challenge avoidance scheme promoters and enablers using both existing and new robust powers given by Parliament. HMRC set up a dedicated team that has been investigating over 100 promoters and others involved in avoidance, including disguised remuneration arrangements, over recent years.
Asked by: Vicky Foxcroft (Labour - Lewisham North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate his Department has made of the number of individuals subject to the 2019 Loan Charge in (a) Lewisham, Deptford constituency, (b) London Borough of Lewisham and (c) London.
Answered by Mel Stride - Shadow Chancellor of the Exchequer
The charge on disguised remuneration (DR) loans will apply to outstanding DR loan balances on 5 April 2019. It is targeted at artificial tax avoidance schemes where earnings were paid in the form of non-repayable loans made by a third party. The loans are provided on terms that mean they are not repaid in practice, so they are no different to normal income and are, and always have been, taxable. The charge on DR loans is expected to raise £3.2bn for the exchequer. The majority, 75%, is expected to come from employers rather than individuals.
The best option for those individuals who are worried about the introduction of the charge on Disguised Remuneration loans is to come forward and speak to HMRC as soon as possible. They will work with all individuals to reach a manageable and sustainable payment plan wherever possible. HMRC has put special arrangements in place so that they are able to agree a payment plan of up to five years automatically for those with income below £50,000 and seven years for those with income below £30,000 where those scheme users are no longer engaging in tax avoidance. HMRC may be able to offer a longer payment plan for those that need more than five or seven years or with income over £50,000, where further information is provided.
The Government estimates that up to 50,000 individuals will be affected by the charge on DR loans, either by settling with HMRC or paying the charge which applies from 05 April 2019. Information is not held at constituency, borough or local authority level.