Asked by: Lord Moylan (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the rate at which His Majesty's Revenue and Customs are currently processing income tax returns compared to previous years, and what steps they are taking to improve the processing of income tax returns in advance of submissions in January.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
By the end of January 2024, over 11.5m tax returns had been submitted for the 2022/23 financial year. Around 97 percent of returns received were online and the majority were processed automatically.
HMRC carries out additional processing work on a small percentage of tax returns. This includes checks, addressing amends made by customers and manually working through returns which are made on paper. This year HMRC is on track to meet targets for processing paper Self Assessment returns which is consistent with previous years.
To ensure taxpayers get support to meet their obligations for filing 23/24 returns, HMRC has recently recruited and trained additional customer service advisors.
Asked by: Lord Moylan (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what consideration they have given to reducing or freezing tobacco excise duty to curtail the illicit and non-duty paid tobacco market, and to minimise the annual tax revenue loss from tobacco duty avoidance.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Tobacco duty aims to raise revenue and reduce harm to public health by discouraging smoking and raised £10bn in 2022/23. High duty rates, making tobacco less affordable, have helped reduce smoking prevalence with the percentage of adult smokers in the UK reducing from 26% in 2000 to 12% in 2023.
Strong enforcement is essential in tackling the illicit tobacco market and minimising the tax gap. HM Revenue and Customs (HMRC) and Border Force published a new illicit tobacco strategy in January 2024, ‘Stubbing Out the Problem)’. This set out the Government’s continued commitment to reduce the trade in illicit tobacco with a focus on reducing demand, and the disruption of organised crime groups behind the illicit tobacco trade.
The strategy is supported by £100 million of new ‘smokefree’ funding over the next 5 years which will boost existing HMRC and Border Force enforcement capability.
Asked by: Lord Moylan (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have to end losses in tax revenue from tobacco duty fraud.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
HM Revenue and Customs (HMRC) launched its first strategy to tackle illicit tobacco in 2000. This, and consequent strategies with Border Force, have reduced the overall tobacco duty tax gap from 21.7% in 2005/6 to 14.5% in 2022/23.
During this time, the duty gap for cigarettes has reduced by a third, and for hand-rolling tobacco by a half.
In January this year HMRC and Border Force published their latest illicit tobacco strategy, ‘Stubbing Out the Problem’. This Government is committed to reducing the trade in illicit tobacco with a focus on reducing demand, and tackling and disrupting the organised crime groups behind the illicit tobacco trade.
The tobacco strategy is supported by £100 million of new smokefree funding over the next 5 years to boost existing HMRC and Border Force enforcement capability.
Asked by: Lord Moylan (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the recent remarks by the Chief Executive of the Institute for Fiscal Studies on cutting the current rate of tobacco duty as a means of increasing tax revenues.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Under the assumptions used in tobacco costings certified by the Office for Budget Responsibility (OBR) at Spring Budget 2024, increasing overall tobacco duty rates increases tobacco duty receipts.
Asked by: Lord Moylan (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the likelihood that further increases in tobacco duty rates will fail to generate further revenue.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Under the assumptions used in tobacco costings certified by the Office for Budget Responsibility (OBR) at Spring Budget 2024, increasing overall tobacco duty rates increases tobacco duty receipts.
Asked by: Lord Moylan (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what estimate they have made of the annual tax revenue loss from illicit and non-duty paid tobacco.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
HM Revenue and Customs (HMRC) publish official statistics relating to measuring tax gaps, which include the estimated annual tax revenue loss from Illicit and non-duty paid tobacco.
The statistics are published annually and the latest figures are set out in Measuring tax gaps 2024 edition: tax gap estimates for 2022 to 2023.
The duty gap for tobacco is estimated at 14.5% of the theoretical tobacco duty liability, or £2.2 billion (£1.7 billion in Excise Duty and £0.5 billion in VAT), in tax year 2022 to 2023.
Asked by: Lord Moylan (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the effect on (1) smaller UK wine producers, (2) smaller UK wine retailers, and (3) imports from smaller overseas wine producers, of the increased administration they will face following the planned termination of the temporary wine easement on 1 February 2025 and the introduction of a new excise regime based on alcohol by volume.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
In August 2023 the previous Government introduced reforms to alcohol duty so that products are taxed in proportion to their alcoholic strength, not volume. The reforms aimed to modernise and simplify the system, to prioritise public health and incentivise consumption of lower strength products.
To help the wine industry adapt to the new duty system, the current, temporary duty easement was introduced as a transitional measure, which was intended to allow time for wine producers to adapt to calculating duty based on alcohol by volume.
By the planned end-date of 1 February 2025, the wine industry will have had over two years to adapt to the new strength-based system.
Asked by: Lord Moylan (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to the Written Answer by Lord Livermore on 20 September (HL1065), what discussions they have had with the Financial Conduct Authority or the Prudential Regulation Authority on their proposals for making diversity and inclusion reporting mandatory through regulation; and what assessment they have made of these regulatory measures in light of the total costs to firms as outlined (1) on page 53 of the Financial Conduct Authority consultation paper Diversity and inclusion in the financial sector – working together to drive change, published in September 2023, and (2) on page 57 of the Bank of England consultation paper Diversity and inclusion in PRA-regulated firms, published in September 2023 and updated in October 2023.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Financial Conduct Authority and the Prudential Regulation Authority are non-governmental bodies which are independent from the Treasury. The government does not make assessments of their consultations.
The Treasury engages closely and regularly with the regulators on a wide range of issues, including ensuring that effective, proportionate regulation is supporting the government’s mission to drive the growth and international competitiveness of the UK’s financial services sector.
Asked by: Lord Moylan (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what is the policy of (1) the Treasury, and (2) the Government Equalities Office, on the consultations being conducted by the Financial Conduct Authority and the Prudential Regulation Authority on new diversity and inclusion reporting requirements for financial services firms; and what assessment they have made of whether those proposals are in line with their policy on increasing economic growth.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) are non-governmental bodies which are independent from the Treasury and have broad powers to make rules in order to advance their statutory objectives. The regulators are required by legislation to carry out their general functions, which include rule-making, in a way that advances their competitiveness and growth objectives.
In line with statutory requirements, the FCA and PRA have included in their consultations an explanation of the compatibility of the proposed rules with their duties, including consideration of the competitiveness and growth objectives.
Asked by: Lord Moylan (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they plan to make the online self-assessment tax return form SA100 available to download, so that taxpayers wishing to submit paper returns do not have to telephone His Majesty's Revenue and Customs to obtain it.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government wants to encourage as many people as possible to complete their self assessments online. HMRC therefore asks taxpayers who do not initially opt to complete their return online to call HMRC. This approach allows HMRC to speak to taxpayers to encourage them to file online, or to find out if they need additional support and guidance to do so, before sending them a paper form if needed. The SA100 form is available for download on gov.uk.