Asked by: Lord Hannan of Kingsclere (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they have made any assessment of the impact of regulation on the ease with which companies can open bank accounts; and whether there is a detrimental impact on investment.
Answered by Baroness Penn - Shadow Minister (Housing, Communities and Local Government)
Access to banking facilities is important for the economy. The provision of banking services is a commercial decision for firms based on a variety of factors, including the local law, regulation of individual countries, an assessment of profitability, or other commercial drivers.
The Government regularly engages with industry to understand the impacts of regulation on businesses’ ability to access banking services. That is why, for example, in last year’s review of the Money Laundering Regulations, the Government committed to consult on options aiming to address the difficulties for businesses in accessing Pooled Client Accounts, including broadening the range of low-risk circumstances in which these accounts may be provided without checks being required on the clients whose funds are held in the account. As committed to in the second Economic Crime Plan, this consultation on changes to the Money Laundering Regulations will begin by the end of this year.
I would encourage businesses seeking a bank account to explore the Business Current Account (BCA) finder tool developed by UK Finance, designed to help businesses compare the full range of bank accounts available and find products that best suit their needs
My officials will continue to engage with industry to understand any emerging issues and assess any impact on investment as a result.
Asked by: Lord Hannan of Kingsclere (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made, if any, of the cost to business of applying VAT on imports from EU states.
Answered by Viscount Younger of Leckie - Shadow Minister (Work and Pensions)
Before the UK left the EU, sales of goods from the EU to UK customers were already subject to VAT. This has not changed. Prior to the end of the transition period, VAT was collected and paid through the VAT return system. For sales to consumers or non-VAT-registered businesses, VAT was either due in the EU Member State or in the UK, depending on whether the volume of the supplier’s sales made into the UK breached an annual threshold. For sales to VAT-registered businesses, the VAT registered-business would be responsible for accounting for the VAT on a VAT return through what is known as a ‘reverse charge’. The VAT-registered business could reclaim this VAT as input tax on the same VAT return, subject to the normal recovery rules. Only sales to the UK from outside the EU were subject to import VAT collection at the border.
Now that the transition period has ended, the UK has used its freedom from EU rules to create a fairer and more robust tax system, while also complying with World Trade Organisation rules by treating EU and non-EU goods the same. For goods in consignments up to £135, VAT is due at the point of sale. Where a UK VAT-registered business provides its VAT registration number to the supplier, the VAT registered business is responsible for accounting for the VAT due on the goods through a reverse charge. For goods in consignments over £135, import VAT is due and UK VAT-registered businesses can choose to use ‘postponed VAT accounting’. Accounting for VAT on a VAT return in these ways allows businesses to reclaim it as input tax on the same VAT return, as was the case under the previous rules, and ensures continuity for businesses.
Asked by: Lord Hannan of Kingsclere (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what discussions they have had, if any, with the UK insurance sector regarding the impact of timing differences arising from Pillar 2 of the Organisation for Economic Co-operation and Development BEPS Framework.
Answered by Lord Agnew of Oulton
OECD discussions on addressing the tax challenges of digitalisation have been ongoing for a number of years, with the detailed frameworks for Pillars One and Two having been under development since 2019.
Over the course of that time the OECD has conducted multiple public consultations on the proposals and had extensive engagement with businesses across sectors to take their views on board.
UK government officials are also engaged with many sectors regarding the potential impact of both pillars, including with the insurance sector on the specific issue of timing differences under Pillar 2.
Asked by: Lord Hannan of Kingsclere (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the impact of the Organisation for Economic Co-operation and Development's proposal for a global minimum corporation tax on the ability of the UK Government to adjust its domestic taxation policy.
Answered by Lord Agnew of Oulton
It is a UK priority to reach a comprehensive two-pillar solution addressing the tax challenges of digitisation.
The details of a final agreement, including on the exact framework for implementation, are still subject to international negotiation.
If a political agreement is reached and both pillars are implemented in the UK, they will be subject to the normal tax policymaking process. That would include legislation in the relevant Finance Bill, with impacts then being formally assessed and set out in a Tax Information and Impact Note upon the introduction of the legislation.
Any significant subsequent changes to that legislation would likewise be made through a future Finance Bill.
Asked by: Lord Hannan of Kingsclere (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether parliamentary approval will be required for a future increase in the world minimum rate of corporation tax under Pillar 2 of the framework on Base Erosion and Profit Shifting.
Answered by Lord Agnew of Oulton
It is a UK priority to reach a comprehensive two-pillar solution addressing the tax challenges of digitisation.
The details of a final agreement, including on the exact framework for implementation, are still subject to international negotiation.
If a political agreement is reached and both pillars are implemented in the UK, they will be subject to the normal tax policymaking process. That would include legislation in the relevant Finance Bill, with impacts then being formally assessed and set out in a Tax Information and Impact Note upon the introduction of the legislation.
Any significant subsequent changes to that legislation would likewise be made through a future Finance Bill.