Written Statements

Thursday 12th November 2020 Written Statements

Thursday 12 November 2020

Tax Policy

Thursday 12th November 2020 Written Statements

[The Financial Secretary to the Treasury (Jesse Norman)]

In line with the tax policy-making framework, the Government consulted on a number of tax policies announced at spring Budget 2020. Today, the Government are publishing responses to some of the consultations that were extended due to covid-19, alongside draft legislation which will need to be introduced.

The Government are also publishing responses to calls for evidence in the market for tax advice, as well as a consultation on making tax digital for corporation tax.

Finally, the Government are making some tax policy announcements for tobacco and vehicle excise duties, measures to tackle promoters of tax avoidance, a small change to off-payroll legislation, and delays to other measures and reviews.

Previously announced publications

The Government are publishing a summary of responses and draft legislation for each of the following measures, as announced at the spring Budget:

Plastic packaging tax

Tackling construction industry scheme abuse

R&D SME tax credit PAYE cap

Tax implications of the withdrawal of the London inter-bank offered rate (LIBOR)

Hybrid and other mismatches

The Government had extended the policy consultation response deadlines for these measures in April, in response to the covid-19 outbreak.

Draft legislation is accompanied by a tax information and impact note (TIIN), an explanatory note (EN) and, where applicable, a summary of responses to consultation document. All publications can be found on the gov.uk website. The Government’s tax consultation tracker has also been updated.

Raising standards for tax advice

The Government are publishing a summary of responses and next steps from the call for evidence on raising standards in the market for tax advice. As a first step towards raising standards, the Government will consult on requiring tax advisers to hold professional indemnity insurance and how to define tax advice. The majority of respondents supported Government action to raise standards.

Tackling promoters of tax avoidance

In line with the Government’s strategy to tackle promoters of tax avoidance schemes, published in March, the Government are today announcing that they will consult in the new year on further measures to tackle promoters. These proposals will build on the proposals announced earlier this year and will:

disrupt the business model of offshore promoters by making it harder for such promoters to access the UK by making their onshore partners equally responsible for the anti-avoidance regime penalties that the offshore promoter generates.

directly tackle the secrecy on which promoters rely; the proposals here would ensure that taxpayers are fully informed of the reality of what is being sold to them.

disrupt the economics of tax avoidance by ensuring that, without delay, promoters face financial consequences for continuing to promote tax avoidance so that promoters cannot continue to profit from avoidance while HMRC investigates them.

give HMRC additional powers to act against companies that continue to promote schemes and who sidestep the rules designed to restrict their activities. The proposals would see such promoters shut down and restricted from setting up similar businesses.

The Government continue to recognise that the many tax advisers who adhere to high professional standards are an important source of support for taxpayers. The proposals are aimed at targeting those promoters who exploit every opportunity to personally profit by sidestepping the rules and whose unscrupulous actions often leave taxpayers with significant tax bills.

The Government continue to recognise that strengthening HMRC powers in the way described must be done in a carefully constrained way. HMRC will again work with stakeholders, and in particular those tax advisers who adhere to high professional standards, to ensure that these proposals are both effective and proportionate.

Making tax digital for corporation tax

The Government are publishing a consultation on the design of making tax digital for corporation tax, as announced on 21 July. This will allow stakeholders to inform the early stage design of making tax digital for corporation tax and to provide businesses with time to prepare.

Further policy announcements:

The Government have made a number of further policy decisions which are being announced today, relating to:

Extending the annual investment allowance provisional £1 million cap

The Government are today announcing a year-long extension to the temporary increase of the annual investment allowance (AIA). The AIA provides firms 100% same year tax relief on qualifying capital expenditure, up to a fixed limit. Instead of allowing the AIA to revert to £200,000 from 1 January 2021, the Government are extending the temporary £1 million cap set at Budget 2018 until 31 December 2021. This announcement:

Responds to the needs of business, giving enhanced tax relief on plant and machinery expenditure;

Provides businesses with upfront support during continuing covid-related uncertainty;

Simplifies taxes for the 99% of businesses investing up to £1 million on plant and machinery assets each year.

Tobacco duty uprating

The Government are announcing the uprating of tobacco duties to protect the public finances, continue the drive to reduce smoking prevalence, and support the Government’s target for a smoke-free England by 2030. In line with the existing escalator, duty rates on all tobacco products will increase by RPI + 2%. In order to narrow the gap between hand-rolling tobacco (HRT) and cigarette duty rates and ensure the Minimum Excise Tax (MET) continues to be effective in the current market, HRT will increase by RPI + 6% and the MET by RPI + 4%. The Treasury is laying an order before the House to enact these changes, which will take effect on 16 November.

Van vehicle excise duty

The Government will not now introduce a new graduated system of vehicle excise duty for light goods vehicles or motorhomes from April 2021, to avoid distracting the automotive sector and businesses more widely from the challenges they currently face in light of the covid-19 pandemic. Motorhomes will continue to be placed in the private/light goods class.

Off-payroll working—technical change to ensure legislation operates as intended

A technical change to the off-payroll working rules will be made in the next Finance Bill. This will ensure the legislation operates as intended from 6 April 2021 for engagements where an intermediary is a company. The change will correct an unintended widening of the definition of an intermediary, which went beyond the intended scope of the policy.

Notification of uncertain tax treatment by large businesses

The Government are announcing the implementation of the new requirement for large businesses to notify HMRC of uncertain tax treatments will be delayed until April 2022. This will allow more time to get the policy and legislation right following the recent consultation, including through further engagement with stakeholders, and will give affected businesses more time to prepare for the change.

Timely tax payments and review of tax administration framework

On 21 July, the Government committed to publishing calls for evidence on timely tax payments and a review of the tax administration framework. Given the continued pressures of the covid-19 outbreak, and with other consultations in progress, the Government will now publish these documents in spring 2021.

Soft drinks industry levy (SDIL) milk review

In 2017, the Government made a commitment to review the exemption for sugary milk and milk-substitute drinks from the soft drinks industry levy (SDIL) by 2020. The Government have been clear that if industry does not make enough progress on voluntarily reformulating these drinks, the Government may extend the SDIL to include them. In light of Public Health England’s latest reformulation report (published earlier this month) that shows good progress has been made in sugar reduction of milk-based drinks, the Government will next consider the exemption for sugary milk and milk-substitute drinks in 2022 after the full reformulation programme completes.

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Service Justice System

Thursday 12th November 2020 Written Statements

[The Secretary of State for Defence (Mr Ben Wallace)]

I am today informing the House that, after further and full consideration of an earlier decision announced in February 2020 in response to the service justice system (SJS) review, I have taken a decision to maintain jurisdictional concurrency when dealing with cases of murder, manslaughter and rape when committed by service personnel in the UK.

Currently, decisions on which jurisdiction should deal with criminal offences in the UK by service personnel are made by the SJS and civilian justice system (CJS) policing and prosecutorial authorities on a case-by-case basis. My intent is to seek views on what improvements can be made to the protocols which guide those decisions and which have developed since Parliament last expressed its view on this subject.

In considering the recommendations made by the service justice system review, I have come to the conclusion that, having agreed to take forward 79 other recommendations, including assurance around the quality of investigations, the SJS is capable of dealing with these offences when they occur in the UK, as well as overseas. The service justice system review strongly supported the continued existence of the SJS and sets out a sound roadmap for its future.

I am not, therefore, content to accept the first recommendation in the review which would undermine the principle of concurrency between the SJS and CJS which is set out in the current legislation. While there will not be a presumption that either system takes primacy over the other, I plan to retain the current role of the Director of Public Prosecutions (in relation to cases in England and Wales) of having the final say of where a case is tried in the unlikely event of disagreement about where the case should be handled.

In light of this decision, my Department will lead an exercise with SJS and CJS policing and prosecutorial authorities to revise all current guidance around jurisdiction for criminal offending by service personnel in the UK. That exercise will include public engagement on factors to be considered relevant in guiding the case-by-case allocation decisions. Parliament will have an opportunity to consider these matters when parliamentary time allows, and I intend to bring forward proposals to place the arrangements for allocating cases between the SJS and CJS on a statutory basis.

My Department will be engaging with the devolved Administrations in Scotland and Northern Ireland to consider the corresponding arrangements that should exist there.

[HCWS577]

Avian Influenza: Kept Birds

Thursday 12th November 2020 Written Statements

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Victoria Prentis)]

High pathogenicity H5N8 avian influenza has been circulating in Europe in recent weeks. There have now been two diagnosed cases in poultry in the UK, in Cheshire and Herefordshire, as well as several findings in wild birds in south-west England. The risk of further H5N8 incursion in wild birds across the UK remains high and has recently been raised to medium for poultry. We will continue to undertake comprehensive disease surveillance over the coming weeks and months.

Public Health England advises that the risk to public health is very low and the Food Standards Agency has said there is no food safety risk for UK consumers.

In response to the risk to poultry and other captive birds, the Department has put in place a statutory avian influenza prevention zone. The zone requires keepers across the country to take additional steps to introduce enhanced biosecurity measures and to protect poultry and other captive birds from contact with wild birds. Some of these measures apply to all keepers, including those with small flocks or pet birds. They include:

cleansing and disinfection of equipment, vehicles and footwear when moving between bird premises;

effective vermin control;

reducing movements of people to the essentials for the birds’ welfare, collecting eggs and feeding;

keeping records of poultry, captive birds and egg movements;

ensuring that buildings are maintained and that repairs are carried out without delay where

water or other contamination may penetrate.

The zone will remain in place indefinitely but will be kept under review and amended as necessary in the light of any changes in circumstances. We have also made changes to licensing arrangements to prohibit events such as bird shows.

Given that the disease is spreading across Europe, the introduction of this zone has been co-ordinated with the devolved Administrations and Scottish and Welsh Governments are introducing similar measures. Northern Ireland officials, who have been in the discussions, are reviewing their risk assessment which will inform their next steps.

We have tried and tested procedures for dealing with such animal disease outbreaks and a strong track record of controlling and eliminating previous outbreaks of avian flu in the UK. Our actions are in line with established practice and with the processes followed in previous years. Avian influenza prevention zones, for example, were introduced in England, Scotland and Wales in 2018. We are working closely with operational partners, devolved Administration colleagues and the industry.

The detections of H5N8 in poultry or captive birds have been dealt with effectively by the Animal and Plant Health Agency. We have taken robust action, imposing zones of up to 10 km (six miles) around infected premises to limit the risk of disease spreading, and culling birds humanely and to high biosecurity standards.

Looking forward, the Department will keep the avian influenza prevention zone under review and will consider amendments to reflect any changes to the level of risk of incursion to wild birds and poultry as well as any further scientific, veterinary and ornithological advice.

We have not yet required mandatory housing of all poultry and captive birds as part of our response to the disease risk. However, such a measure remains under active review as a potentially important step.

We continue to urge bird keepers to be vigilant for any signs of disease, ensure they are maintaining good biosecurity on their premises, seek prompt advice from their vet and report suspect disease to APHA (as they must do by law).

We strongly advise keepers to register on the poultry register so as to receive notifications and disease alerts. This is mandatory for all those with flocks of over 50 birds. Registration is easy and can be found at: www.gov.uk/ guidance/bird-gatherings-licences.

[HCWS576]

HMICFRS’s Report: National Crime Agency and Regional Organised Crime Units

Thursday 12th November 2020 Written Statements

[The Secretary of State for the Home Department (Priti Patel)]

The National Crime Agency (NCA) leads the fight against serious and organised crime (SOC). It has the power to task other law enforcement partners and a capability, with local to international reach, to disrupt the impact of SOC on the UK.

This is the seventh HMICFRS inspection of the NCA and examines the relationship between the agency and the regional organised crime units (ROCU). The focus is specifically on the collaboration arrangements, the role of the NCA’s regional organised crime co-ordinators (RCCs), co-ordination and support of operational activity, threat prioritisation and integration and co-location.

I have asked HMICFRS to publish the report. It will be published today and will be available online at www.justiceinspectorates.gov.uk. I will arrange for a copy to be placed in the Libraries of both Houses.

The inspection found that NCA and ROCUs are working well in a number of areas of law enforcement. The NCA’s provision of specialist capabilities to the network, such as protected persons and kidnap and extortion is seen as a positive example. Meeting structures for tasking and co-ordinating operational activity work well, with ROCUs and the NCA represented at regional and national level. National tasking of regional cyber and undercover online (UCOL) assets is judged as mature and efficient. The report also emphasises a number of areas for improvement including the need for greater interoperability and a more systematic approach to joint working; a clearer understanding within ROCUs of the roles and responsibilities of the NCA; and more effective duty management within the NCA’s control room to ensure monitoring of the location and availability of its operational resources.

It is for the NCA’s director-general to respond to these recommendations.

The inspection also identified a need to review current funding arrangements for ROCUs; consider changes to legislation that would allow NCA to task ROCUs directly; and as part of the review of the strategic policing requirement, consider how greater emphasis is placed on national threats such as SOC by police and crime commissioners and chief constables. These recommendations are being taken forward by my officials.

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Justifying Authority for New Nuclear Power: Departmental Responsibility

Thursday 12th November 2020 Written Statements

[The Prime Minister (Boris Johnson)]

Responsibility for the justifying authority for new nuclear power transferred from the Department for Business, Energy and Industrial Strategy to the Department for Environment, Food and Rural Affairs on 6 October 2020.

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Planning Act 2008 Applications: A303

Thursday 12th November 2020 Written Statements

[The Minister of State, Department for Transport (Andrew Stephenson)]

I have been asked by my right hon. Friend the Secretary of State to make this written ministerial statement. This statement concerns two applications made under the Planning Act 2008 relating to the A303.

The first application concerns the proposed construction by Highways England of a new two-lane dual carriageway for the A303 between Amesbury and Berwick Down in Wiltshire (also known as the “A303 Stonehenge” application), which the Secretary of State has today approved.

The second application concerns the proposed construction by Highways England of a continuous dual carriageway on the A303 linking the Podimore roundabout and the Sparkford bypass.

Under section 107(1) of the Planning Act 2008, the Secretary of State must make his decision within three months of receipt of the examining authority’s report unless exercising the power under section 107(3) to extend the deadline and make a statement to the House of Parliament announcing the new deadline. The Secretary of State received the examining authority’s report on the A303 Sparkford to Ilchester Development Consent Order application on 12 September 2019 and the deadline for a decision was previously extended from 12 December 2019 to 17 July 2020, and then further extended until 20 November 2020 to allow for further work to be carried out.

The deadline for the decision is to be further extended to 29 January 2021 (an extension of just over two months) to enable further information to be provided by the applicant and the defence infrastructure organisation regarding outstanding concerns pertaining to the issue of bird strike.

The decision to set a new deadline is without prejudice to the decision on whether to give development consent.

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