Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of the Government’s draft legislative changes to part 15C of the Corporation Tax Act 2009 on (a) jobs and (b) new productions in the theatre sector; and if he will meet UK Theatre and the Society of London Theatre to discuss those changes.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
HMRC has published two information notes on Administrative changes to the creative industry tax reliefs and, Clarifications of the rules for cultural tax reliefs. These notes include impacts of the changes and can be found here: Administrative changes to the creative industry tax reliefs - GOV.UK (www.gov.uk) and Clarifications of the rules for cultural tax reliefs - GOV.UK (www.gov.uk)
Officials held a meeting with Society of London Theatre to discuss the theatre tax relief draft legislative changes on 23 November 2023.
Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will take steps to reduce the (a) time taken and (b) administrative burden for small- and medium-sized businesses to make research and development tax credit claims.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
At Spring Budget 2023 the Government announced a new permanent rate of relief for the most R&D intensive loss-making small and medium sized enterprises (SMEs). The Government also announced at Autumn Statement 2023 the merging of the current SME and RDEC (Research and Development Expenditure Credit) tax relief schemes from April 2024, simplifying the system and providing greater support for UK companies to drive innovation. Changes were also made reducing the intensity threshold in the R&D intensives scheme from April 2024, allowing around 5,000 extra SMEs to qualify for an enhanced rate of relief.
From 8th August 2023 it became mandatory to provide detailed information upfront before submitting an R&D claim, supporting claimants in getting their tax right and reducing the need for HMRC to ask for further information to check claims.
HMRC also continues to promote the Advanced Assurance scheme to eligible SMEs (eligibility includes companies with a turnover of below £2 million and less than 50 employees) applying for R&D tax relief for the first time, to give certainty and assure compliance with the R&D tax regime.
Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the effectiveness of the level of fines issued by HMRC for the late submission of self-assessment tax returns for self-employed people who have not earned above the threshold for paying tax.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
HMRC issues Self Assessment (SA) tax returns to customers when the information they hold suggests that the customer meets the published criteria for completing one. HMRC often cannot determine someone’s tax liability until they have sent in a tax return, therefore they need the return to establish whether there is tax due or not. Late filing and payment penalties are charged to encourage customers to file on time, but HMRC can cancel a customer’s late filing penalty if the customer has a reasonable excuse. Customers can also ask HMRC to remove them from the SA process for future years if they no longer meet the criteria.
From October 2011 the penalty legislation changed, from this point the capping of penalties was no longer factored into the calculation and any fixed penalty applied remained at the full amount regardless of liability. Although no change to the current penalty regime has been announced, Penalty Reform within Making Tax Digital will change the way HMRC calculates penalties for late Submission and late payment of tax. The new legislation will factor in the Liability amount, Filing frequency and length of time outstanding within its penalty calculations.
In reforming late payment and late filing penalties HMRC’s aim is to encourage those who persistently default to comply with their tax obligations rather than penalise those who make occasional errors.
Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential impact of the Financial Services and Markets Bill on (a) preventing the loss of local access to cash and banking services, (b) support for local communities to create banking hubs and (c) protecting free access to cash and in-person banking services.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The way consumers and businesses make payments and interact with their banking continues to develop at pace, bringing significant benefits to those who choose to opt for the convenience, security, and speed of digital payments and banking.
The government is currently taking legislation through Parliament as part of the Financial Services and Markets Bill to protect access to cash. The Bill will establish the Financial Conduct Authority (FCA) as the lead regulator for access to cash and provide it with appropriate powers to seek to ensure reasonable provision of withdrawal and deposit facilities. These powers will allow the FCA to take account of factors it considers appropriate, which could include cost for end users and accessibility.
Following the government’s commitment to legislate, industry is working together to develop new initiatives to provide shared access to cash services. As a result, communities can request an assessment of access to cash in their area by LINK: https://www.link.co.uk/consumers/request-access-to-cash/
The government has welcomed industry’s commitments and, in recognition of these developments, the Bill grants HM Treasury powers to bring the operators of cash coordination arrangements under the FCA’s oversight.
In terms of access to banking services, the government believes that all customers, wherever they live, should have appropriate access to banking services. However, decisions on opening and closing branches are a commercial issue for banks and building societies. The government does not intervene in these decisions or make direct assessments of these branch networks.
Guidance from the FCA sets out its expectation of firms when they are taking decisions relating to the closure of their branches or free-to-use ATMs. Firms are expected to carefully consider the impact of planned branch closures on the everyday banking and cash access needs of their customers and possible alternative access arrangements. This ensures that the implementation of closure decisions is undertaken in a way that treats customers fairly. The FCA expects firms to exercise particular care with vulnerable customers, such as those who are elderly or disabled, and the guidance has recently been strengthened to enhance protections for consumers that rely on branch services.
Alternative options for access can be via telephone banking, through digital means such as mobile or online banking, and the Post Office. Furthermore, industry has committed to new shared bank hubs in 27 locations across the UK to date, in addition to two existing pilot sites. These hubs provide basic banking services, including cash withdrawals and deposits, and a dedicated space where community bankers from participating banks can meet customers of that bank.
Asked by: Zarah Sultana (Labour - Coventry South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the (a) potential impact of the higher rate of VAT charged on public electric vehicle charging compared with home charging on the uptake of electric vehicles and (b) potential distributional impact of that differential on households by income bracket.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
In order to keep costs down for families, the supply of electricity for domestic use, including charging an electric vehicle (EV) at home, attracts the 5 per cent reduced rate of VAT. However, electricity supplied at EV charging points in public places is subject to the 20 per cent standard rate of VAT.
The Government has not specifically introduced a reduced rate for charging EVs at home. However, the practical challenges of differentiating between the electricity used at home for general domestic purposes and electricity used to charge EVs currently mean that the reduced rate is effectively being applied to EV charging at home.
Harmonising the rate of VAT on electricity for public and domestic charging points for electric vehicles would require the Government to expand the existing VAT relief on electricity for domestic use (that is also used to charge EVs at home) to electricity for use at public EV charge points, and this would come at a cost.
VAT makes a significant contribution towards the public finances, raising around £130 billion in 2019-20, and helps fund the Government's priorities including the NHS, schools, and defence. Any loss in tax revenue would have to be balanced by a reduction in public spending, increased borrowing, or increased taxation elsewhere.
The Government is committed to supporting the transition to zero emission vehicles to help the UK meet its net-zero obligations. The Government has committed £2.5 billion since 2020 to support the transition to zero emission vehicles, which funds targeted vehicle grants and the rollout of charging infrastructure.
There are currently no plans to change the VAT treatment of electricity supplied at public EV charge points. However, the Government keeps all taxes under review, and carefully considers behavioural effects and distributional impacts when making decisions on tax policy.