Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what recent assessment they have made of self-assessment as a mechanism for ensuring the collection of all taxes owed to HMRC.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
Over £100 billion of tax receipts in 2021-2022 were received through Income Tax Self Assessment and Corporation Tax Self Assessment.
Individuals and businesses with taxable income that has not already been fully taxed at source are required to report that income and pay the tax due through the Income Tax Self Assessment system. Companies self-assess their tax liabilities and pay their tax through the Corporation tax self assessment system.
HMRC has the power to check self-assessed tax liabilities, investigate and assess further tax if necessary.
HMRC monitors the effectiveness of Self Assessment in a variety of ways, including the annual measurement of tax receipts and through estimates and analysis of the tax gap. HMRC also engages with taxpayers and their representatives at a variety of customer and agent community forums such as the Admin Burden Advisory Board, the Individual Stakeholder Forum and the Business Tax forum.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have to increase the number of tax compliance investigations.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
HMRC closed 256,000 civil compliance checks in 2021-22, up from 248,000 the previous year. Compliance yield fell during the pandemic as we reprioritised work recognising the challenges faced by individuals and businesses. Any compliance risks that we did not pick up during the Covid period are still there and available for us to work.
The most efficient way to get tax right across 45 million individuals and 5 million businesses is for HMRC to guide the taxpayer by intervening before anything has the chance to go wrong. That includes things like prompts built into the online Self Assessment System, which flag when a customer’s entry is out of line with what is expected. It also includes creating policies that make it easy for people to do the right thing and in a way that makes some historical forms of non-compliance nearly impossible.
HMRC’s approach is underpinned by cutting-edge data analysis, which we use to identify where tax is most at risk of not being paid and design tailored, targeted and proportionate interventions to address it. A ‘compliance check’ allows us to investigate someone’s tax affairs if we think they may not be paying the right amount of tax.
The Government continues to invest in HMRC to ensure the right amount of tax is paid. For example, new measures were announced at the Autumn Statement 2022 which are forecast to raise £1.7 billion in tax revenue over the next five years.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how many criminal prosecutions for tax offences have been undertaken by HMRC each year since 2010 up until the last year for which records are available.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
Financial Year | Prosecutions |
2011/12 | 449 |
2012/13 | 576 |
2013/14 | 761 |
2014/15 | 709 |
2015/16 | 880 |
2016/17 | 887 |
2017/18 | 917 |
2018/19 | 749 |
2019/20 | 691 |
2020/21 | 163 |
2021/22 | 236 |
Total | 7372 |
The information provided above shows the number of prosecutions resulting from HMRC criminal investigations since the start of the 2011/2012 financial year - when the Department’s assured data begins.
However, HMRC is not a prosecuting authority. Cases are prepared to the highest evidential standard and passed to the relevant prosecuting authority, who decide if a case progresses to court.
HMRC is therefore reliant on the prosecuting authorities and the criminal justice system to progress cases to conclusion. This is a lengthy process and outcomes achieved in any given year are not necessarily reflective of HMRC’s activity in the same period.
The number of prosecutions has fallen over the last three years. There are a number of contributing factors here, including ongoing delays within the courts system due to the pandemic, and HMRC’s strategic choice to focus on harder-to-reach targets and tackle the most serious frauds.
Prosecutions represent one element of a wide-ranging HMRC response to tax fraud, which also includes civil investigations and sanctions, data and intelligence analysis, risk detection and profiling, education, legislative change, partnering with the public and private sectors, and target-hardening of our systems and processes.
In practice, the Department focusses interventions where they have most impact, an approach which is about reaching the right outcome for the UK, rather than chasing arbitrary targets for arrests and prosecutions.
Most of HMRC’s work to tackle tax fraud makes use of civil powers because these are the most proportionate, economical and effective way to recover monies owed and tackle fraud; as such, criminal investigations are focused on cases which meet certain criteria to ensure they deliver both value for money for the taxpayer and the maximum impact on tax fraud.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the Department for Levelling Up, Housing & Communities:
To ask His Majesty's Government what estimate they have made of the amount of money collected by local authorities through fees and charges that are not council tax, business rates and rents for social housing.
Answered by Baroness Scott of Bybrook - Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)
Sales, fees and charges income is reported in local authorities' Revenue Outturn returns and totalled £13.973 billion in 2021-22, the latest year for which these data are available. This excludes council tax, business rates and housing revenue account income.
This information is publicly available (attached) in table 2x here.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the Department for Levelling Up, Housing & Communities:
To ask His Majesty's Government what recent assessment they have made of the adequacy of the bands used for calculating council tax.
Answered by Baroness Scott of Bybrook - Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)
As the Secretary of State set out recently, we keep all such policies under review.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the (1) operation, (2) benefits, and (3) risks, of (a) Non-Fungible Tokens (NFTs), and (b) the wider blockchain.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
The Government established a Cryptoassets Taskforce in 2018, consisting of HM Treasury, the Bank of England and the Financial Conduct Authority (FCA). The Taskforce’s objectives include exploring the impact of cryptoassets, the potential benefits and challenges of Distributed Ledger Technology (DLT, which includes blockchain technology) in financial services; as well as monitoring ongoing developments in cryptoasset markets.
These crypto technologies could have a profound impact across financial services, including reducing risk, working capital, and disintermediating friction. However, there are also associated risks. As the Bank of England’s Financial Policy Committee noted, as crypto technologies grow and become more interconnected with the core financial system we’ll need to ensure that regulators have the right tools to manage the associated risks. That is why the Government is taking forward a number of regulatory initiatives to manage risks and support innovation so that people and businesses can use new technologies both reliably and safely.
The Government is putting in place a Financial Market Infrastructure (FMI) Sandbox, which will enable firms to experiment with the use of new technologies like DLT in providing the services that underpin financial markets. The Government is also exploring the possible use of DLT in the issuance and lifecycle of a sovereign debt instrument. Further details on this research programme will be set out in due course.
The non-fungible tokens (NFTs) market is evolving rapidly and remains at an early stage of development. Most NFTs are not currently subject to financial services regulation in the UK and the Government has proposed to exclude them from the financial promotions regime on the basis that NFTs can represent a wide array of different assets which might constitute non-financial services products. The Government will continue to closely monitor how NFTs are used in financial services and take further action if necessary.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the Ministry of Justice:
To ask His Majesty's Government what assessment they have made of the value to (1) individuals, and (2) families, of pro bono legal work undertaken by lawyers.
Answered by Lord Bellamy - Parliamentary Under-Secretary (Ministry of Justice)
The Ministry of Justice has not specifically assessed the value of pro bono work to either family or individuals. However, research conducted by KPMG in 2017 indicates that the pro bono time dedicated by legal professionals was worth approximately £439 million in 2017. Additionally, the Bar Council suggest that 4,618 barristers have done pro bono work in the last year.
The Government highly values the legal sector’s contributions through pro bono work and the benefits this work provides.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the Department for Transport:
To ask His Majesty's Government what assessment they have made of the use of digital rail freight technologies in the UK freight network.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The adoption of digital technologies, along with targeted conventional interventions, is a cost-effective way to potentially release additional capacity on the existing network.
Under the Future of Freight plan, the government has committed £7 million to the Freight Innovation Fund to drive the commercialisation of technology, including digital, across all freight modes. It has also provided early stage research and development funding through Transport Research and Innovation Grants (TRIG), the latest awards included funding to develop a web platform for short notice freight train wagon booking to maximise freight capacity.
Government is also encouraging further innovation through the First of a Kind scheme. This year, bids were invited to address a range of potential challenges, including those where digital technologies could provide solutions, such as timetabling and scheduling, routing and tracking, automation of freight handling and modal interchanges, and asset maintenance.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the Department for Transport:
To ask His Majesty's Government what plans they have, if any, to introduce unmanned aerial vehicle technology for general data acquisition on the rail network.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The use of drone technology for data acquisition is already prevalent on the rail network.
Network Rail drones gather data, videos and images of the railway for regular maintenance purposes. Drones can reach areas which are usually difficult to access, such as roofs, bridges, coastal areas, the overhead wires that power electric trains and communication masts.
Inspecting the railway in this way also means lines can be kept open to train services and keep workers safe as engineers are not out on the track unnecessarily.
Asked by: Lord Kennedy of Southwark (Labour - Life peer)
Question to the Department for Transport:
To ask His Majesty's Government what plans they have, if any, to introduce double decker trains to the UK rail network.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The Government does not have any plans to introduce double decker trains to the UK national rail network.
Double decker trains would require significant civil engineering investment including modifications to station roofs, electrification equipment, signal gantries, bridges, platforms and many other structures close to the line which would be costly and disruptive to passengers.