Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to the Written Answer by Lord Livermore on 11 February (HL4630), whether the Treasury Permanent Secretary has been informed of the identity of the ultimate donors who are financing the donations from Labour Together to the Chancellor of the Exchequer.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
There are established processes in place for the declaration and management of private and financial interests held by ministers (as set out in the Ministerial Code). These have been followed.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to the Written Answer by Baroness Vere of Norbiton on 25 April (HL3766), when they sought permission from the EU to extend the sunset clause for enterprise investment schemes and venture capital trust schemes.
Answered by Baroness Vere of Norbiton
The government’s engagement with the EU Commission on the extension of the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) sunset clauses is ongoing.
The government believes the schemes continue to be consistent with subsidy control principles and address an evidenced market failure.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to remarks by Baroness Vere of Norbiton on 21 February (HL Deb col 666) with regard to the Trade and Cooperation Agreement in the context of engaging with the EU for approval for extending the enterprise investment scheme (EIS) and venture capital trust (VCT) scheme, whether the subsidy control provisions of the Trade and Cooperation Agreement apply to EIS and VCT relief, in particular the requirement under Article 363 of that agreement that a subsidy must be selective.
Answered by Baroness Vere of Norbiton
The government is extending the sunset clause for the Enterprise Investment Scheme (EIS) and the Venture Capital Trust (VCT) scheme to 2035.
The UK-EU Trade and Cooperation Agreement is now the primary framework governing subsidy control between the UK and EU. As such, EU State aid rules no longer apply to the UK, save for the limited circumstances covered by the Windsor Framework.
For the EIS and VCT schemes, the government is engaging with the EU, under the Windsor Framework, due to Northern Ireland’s unique access to the EU Single Market.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the potential (1) gain, or (2) loss, to the Treasury of equating capital gains and income tax votes.
Answered by Baroness Penn
Sums arising which meet the definition of carried interest are properly assessed as chargeable gains subject to capital gains tax (CGT) of 18 per cent or 28 per cent for higher rate taxpayers.
In some circumstances, it is possible for sums meeting the definition of carried interest to be subject to income tax and additionally, capital gains tax. Here, double taxation would be a disproportionate outcome so relief is provided from this higher rate CGT charge to reduce the effective taxation, but only down to the higher of the two rates.
No assessment has been made of the cost of relieving these instances of double taxation.
In 2020, the then Chancellor commissioned the Office of Tax Simplification (OTS) to carry out a review of Capital Gains Tax (CGT). The OTS provided a costing on aligning CGT rates with those of Income Tax. Please see Paragraph 2.19 of the attached publication.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the (1) cost, or (2) gain, to the Treasury of the removal of carried interest relief from capital gains tax.
Answered by Baroness Penn
Sums arising which meet the definition of carried interest are properly assessed as chargeable gains subject to capital gains tax (CGT) of 18 per cent or 28 per cent for higher rate taxpayers.
In some circumstances, it is possible for sums meeting the definition of carried interest to be subject to income tax and additionally, capital gains tax. Here, double taxation would be a disproportionate outcome so relief is provided from this higher rate CGT charge to reduce the effective taxation, but only down to the higher of the two rates.
No assessment has been made of the cost of relieving these instances of double taxation.
In 2020, the then Chancellor commissioned the Office of Tax Simplification (OTS) to carry out a review of Capital Gains Tax (CGT). The OTS provided a costing on aligning CGT rates with those of Income Tax. Please see Paragraph 2.19 of the attached publication.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what estimate they have made of the net change in revenue to His Majesty's Revenue and Customs of abolishing the non-domiciled individual status in the UK.
Answered by Baroness Penn
HMRC publishes annual statistics on information about individuals claiming non-domiciled status in the UK. The latest information shows that non-UK domiciled taxpayers are estimated to have been liable to pay over £7.9 billion in UK income tax, capital gains tax and National Insurance contributions in 2020-21 and have invested over £6 billion in the UK using the Business Investment Relief scheme introduced in 2012.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they remain committed to the extension of the Enterprise Investment Scheme and Venture Capital Trusts Scheme beyond 2025 as announced on 23 September.
Answered by Baroness Penn
The Government remains supportive of the Enterprise Investment Scheme and Venture Capital Trusts. The Government will engage with businesses, investors, and others on any decisions made regarding the schemes.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the amount of national insurance contributions which would be raised if all partners of Limited Liability Partnerships were subject to employers' National Insurance contributions.
Answered by Viscount Younger of Leckie - Shadow Minister (Work and Pensions)
No such assessment has been carried out as the Government has no current plans to subject members of a Limited Liability Partnerships (LLPs) to employer National Insurance contributions (NICs).
Individual members of LLPs are taxed in the same way as partners in a general partnership, paying Class 4 and Class 2 NICs like other partners and self-employed individuals. If members fall within the salaried member rules introduced by the Finance Act 2014, they are taxed as employees, paying Class 1 NICs.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to their Growth Plan 2022 (CP 743), published on 23 September, whether the extensions to the Enterprise Investment Scheme and Venture Capital Trusts will make those schemes permanent.
Answered by Viscount Younger of Leckie - Shadow Minister (Work and Pensions)
In the Growth Plan 2022 published on 23 September, the Government made clear its support for the Enterprise Investment/Venture Capital Trust schemes. The Government remains supportive of extending them in the future and will engage with stakeholders on the process of implementing this extension.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the potential increase in revenue should members of limited liability partnerships become subject to an increase in national insurance contributions from April 2022 at the same rate of increase as employees.
Answered by Baroness Penn
No such assessment has been carried out. Employees, the self-employed and members of a Limited Liability Partnership who are subject to National Insurance contributions (NICs) will also be subject to the 1.25% NICs increase for the tax year 2022/23 and the Health and Social Care Levy from April 2023.