Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the potential merits of introducing a permanent lower level of VAT for all food and beverages sold in pubs to support the pubs and brewery sector.
Answered by Jesse Norman
In order to support the cash flow and viability of around 150,000 businesses and to protect over 2.4 million jobs, the Government has applied a temporary reduced rate of VAT (5 per cent) to goods and services supplied by the tourism and hospitality sectors, which will now end on 30 September 2021. On 1 October 2021, a new reduced rate of 12.5 per cent will be introduced for these goods and services to help affected businesses manage the transition back to the standard rate. The new rate will end on 31 March 2022.
The Government has been clear that the reduced rate of VAT is a temporary measure. It is right that, as restrictions are lifted and demand for goods and services in the tourism and hospitality sectors increases, this relief is reduced and eventually removed in order to rebuild and strengthen the public finances. This policy will cost the Exchequer over £7 billion and, while the Government keeps all taxes under review, there are no plans to make the reduced rate of VAT permanent.
VAT raised around £130 billion in 2019/20 and helps to fund key spending priorities. Any reduction in tax paid is a reduction in the money available to support important public services, including the NHS and policing. While all taxes are kept under review, any decision to grant new permanent VAT reliefs would have to be balanced by a reduction in public spending, increased borrowing or increased taxation elsewhere.
Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the potential merits of introducing lower business rates for pubs and breweries in response to the economic conditions as a result of the covid-19 outbreak.
Answered by Kemi Badenoch - President of the Board of Trade
In response to the pandemic, the Government provided an unprecedented business rates holiday for eligible retail, hospitality and leisure properties in England, including pubs. This meant eligible properties paid no business rates for 15 months from 1 April 2020, and thanks to the new 66% capped relief which took effect on 1 July 2021, over 90% of eligible businesses are estimated to see a 75% reduction in their business rates bill across this entire financial year to next April.
In addition, the Government is providing £1.5 billion of additional support to businesses that have not already received business rates relief. This new relief will be awarded through funding for Local Authorities, taking into account the economic impact COVID-19 has had on specific sectors.
Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he has made an assessment of the potential merits of increasing the Digital Services Tax from 2 per cent to 10 per cent to help rebuild the economy following Covid-19' and if he will make it his policy to implement that change.
Answered by Jesse Norman
It is right that profitable companies share in the burden of restoring the public finances to a sustainable footing following the COVID-19 pandemic. In order to support this goal, the Chancellor announced at the Budget that Corporation Tax would increase to 25% from April 2023, raising over £45 billion over the next five years.
The Government supports the G7 agreement on global tax reform that would lead to large digital businesses paying more tax here in the UK and UK HQ multinationals paying more tax on their global profits, helping to fund public services and level the playing field for UK firms.
The DST is intended to serve as a temporary solution before a global digital tax solution is reached. It is the Government’s strong preference to secure a comprehensive global solution on digital tax and remove the DST once this is implemented.
Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of including universal credit advance payments in the Debt Respite Scheme (Breathing Space).
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The breathing space scheme launched on 4 May 2021, and includes most personal debts and debts owed to Government, including Universal Credit overpayments. The Government considers that, for breathing space to be successful, it needs to include a wide range of debts.
The Government recognises the importance of including all Universal Credit debts in breathing space, and is committed to including Universal Credit advances within the scheme as soon as possible.
This will happen at a later date to ensure that the significant IT changes the Department for Work and Pensions needs to make do not compromise the safe delivery of Universal Credit, which is now supporting 6 million people. It has always been possible to defer repayments of Universal Credit Advances for 3 months in cases of hardship. In addition, from April 2021, the timeframe for the repayment of advances has been extended from 12 months to 24 months.
Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to support recipients of grants from the Self-Employment Income Support Scheme who are being refused mortgages as a result of financial insecurity following the covid-19 outbreak.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Up to 9 May, £24.5bn has been paid in Self Employed Income Support Scheme grants in total. Across the four schemes 2.8m individuals have received a grant and 8.8m total grants have been claimed.
Decisions concerning the pricing and availability of loans, including application requirements, remain commercial decisions for lenders and the Government does not seek to intervene. For individuals applying for new credit, it remains important that lenders are able to carry out proper checks to ensure that they are not lending in an unaffordable way, especially if, for example, a borrower’s income had not yet returned to the levels it was at pre Covid-19. Where an individual has been refused a mortgage with one provider, we would also urge them to shop around, recognising lenders do not all take the same approach to assessing affordability.
Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Answer of 19 May 2020 to Question 45025 on Self-Employment Income Support Scheme: Carers, if he will make an assessment of the potential merits of amending the eligibility criteria for the Self-Employment Income Support Scheme so that trading income does not have to exceed the amount of (a) other income and (b) taxable benefits including carer's allowance.
Answered by Jesse Norman
The design of the Self-Employment Income Support Scheme including the requirement that trading profits must be at least equal to non-trading income, means it is targeted at those who are most dependent on their self-employment income. That continues to be the case.
HMRC data shows that the majority of people with positive profits who do not meet the 50 per cent self-employment income test had income from employment, which means they potentially have access to the Coronavirus Job Retention Scheme, as well as other elements of the very substantial package of support made available by the Government
Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 26 April 2021 to Question 182103 on Health Services: Private Sector, if he will publish the rationale for his decision to make covid-19 financial support, such as business rates discounts and grants, available to betting shops but not some dental practices.
Answered by Kemi Badenoch - President of the Board of Trade
The Government has provided enhanced support to the retail, hospitality and leisure sectors through business rates relief given the direct and acute impacts of the COVID-19 pandemic on those sectors.
The Government has targeted COVID-19 business grant schemes, including Restart Grants, at businesses that have been mandated to close, many of whom are facing high fixed property related costs. This was on the basis that these businesses are less likely to have sufficient cash reserves to meet their costs. These businesses have also continued to be hardest hit by social restrictions and social distancing over the last few months, and therefore have a reduced ability to generate revenue to cover their costs.
A range of further measures to support all businesses, including dental practices, have also been made available, such as the extension of the furlough scheme, Recovery Loan Schemes, and enhanced Time to Pay for Taxes.