Asked by: Adrian Bailey (Labour (Co-op) - West Bromwich West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions his officials had with the Insolvency Service on the draft Finance Bill 2019-20 prior to its publication on 11 July 2019; and whether views were sought on the policy to make HMRC a secondary preferential creditor in insolvencies.
Answered by Jesse Norman
The Government carefully considered the case for reform prior to announcing this change last year, and it is the Government’s view that taxpayers can reasonably expect that when they have successfully paid their taxes, these go to fund public services as intended.
This measure represents a proportionate approach that balances the interests of taxpayers, the Exchequer, and other creditors.
The Government expects the impact on the sustainability of Pension Protection Fund (PPF) to be marginal. This reform will not lead to a significant change in recoveries to the PPF compared to current returns.
The Government does not expect this reform to affect significantly SMEs’ access to finance or corporate insolvencies, and in line with the Government’s commitment to open and consultative policymaking is engaging with a wide variety of stakeholders to ensure policy changes are well informed and based upon the best available evidence.
Asked by: Adrian Bailey (Labour (Co-op) - West Bromwich West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of establishing HMRC as a secondary preferential creditor in insolvencies on the sustainability of the Pension Protection Fund.
Answered by Jesse Norman
The Government carefully considered the case for reform prior to announcing this change last year, and it is the Government’s view that taxpayers can reasonably expect that when they have successfully paid their taxes, these go to fund public services as intended.
This measure represents a proportionate approach that balances the interests of taxpayers, the Exchequer, and other creditors.
The Government expects the impact on the sustainability of Pension Protection Fund (PPF) to be marginal. This reform will not lead to a significant change in recoveries to the PPF compared to current returns.
The Government does not expect this reform to affect significantly SMEs’ access to finance or corporate insolvencies, and in line with the Government’s commitment to open and consultative policymaking is engaging with a wide variety of stakeholders to ensure policy changes are well informed and based upon the best available evidence.
Asked by: Adrian Bailey (Labour (Co-op) - West Bromwich West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the policy to make HMRC a secondary preferential creditor in insolvencies on the number of corporate insolvencies from Q1 2020 onwards.
Answered by Jesse Norman
The Government carefully considered the case for reform prior to announcing this change last year, and it is the Government’s view that taxpayers can reasonably expect that when they have successfully paid their taxes, these go to fund public services as intended.
This measure represents a proportionate approach that balances the interests of taxpayers, the Exchequer, and other creditors.
The Government expects the impact on the sustainability of Pension Protection Fund (PPF) to be marginal. This reform will not lead to a significant change in recoveries to the PPF compared to current returns.
The Government does not expect this reform to affect significantly SMEs’ access to finance or corporate insolvencies, and in line with the Government’s commitment to open and consultative policymaking is engaging with a wide variety of stakeholders to ensure policy changes are well informed and based upon the best available evidence.
Asked by: Adrian Bailey (Labour (Co-op) - West Bromwich West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of establishing HMRC as a secondary preferential creditor in insolvencies on the ability of SMEs to access finance.
Answered by Jesse Norman
The Government carefully considered the case for reform prior to announcing this change last year, and it is the Government’s view that taxpayers can reasonably expect that when they have successfully paid their taxes, these go to fund public services as intended.
This measure represents a proportionate approach that balances the interests of taxpayers, the Exchequer, and other creditors.
The Government expects the impact on the sustainability of Pension Protection Fund (PPF) to be marginal. This reform will not lead to a significant change in recoveries to the PPF compared to current returns.
The Government does not expect this reform to affect significantly SMEs’ access to finance or corporate insolvencies, and in line with the Government’s commitment to open and consultative policymaking is engaging with a wide variety of stakeholders to ensure policy changes are well informed and based upon the best available evidence.
Asked by: Adrian Bailey (Labour (Co-op) - West Bromwich West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reasons the mini-bond market is not regulated by the Financial Conduct Authority.
Answered by John Glen - Shadow Paymaster General
It is not a regulated activity for firms to issue their own securities, including mini-bonds, due to an exemption within the Regulated Activities Order 2001. This exemption exists to ensure that companies in the real economy can raise finance to fund their business without having to become authorised by the Financial Conduct Authority (FCA).
However, to protect consumers, the marketing and promotion of such securities, including mini-bonds, are subject to the financial promotion restrictions set out in the Financial Services and Markets Act. This requires that the content of any financial promotion be approved by an FCA authorised firm unless an exemption applies. It is the responsibility of the FCA authorised firm to ensure the financial promotion is clear, fair and not misleading. Authorised firms that fail to meet these requirements may be subject to enforcement action by the FCA.
HM Treasury keeps the regulatory framework for financial services under review, and updates it as necessary. We are committed to maintaining a strong and safe financial system, with high standards of consumer protection. On 1 April, I announced that I will direct the FCA to launch an investigation into the events at London Capital & Finance, a firm which issued mini-bonds in order to fund loans that it made to other parties. This followed a request from the FCA Chair, Charles Randell, to launch such an investigation.
Asked by: Adrian Bailey (Labour (Co-op) - West Bromwich West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of intra-EU traders who need to register for an EORI number that (a) are and (b) are not already VAT registered.
Answered by Mel Stride - Shadow Secretary of State for Work and Pensions
UK traders that only trade with the EU will need an EORI number in the event the UK leaves the EU without a deal. HMRC estimated that in 2017 there were 144,000 VAT-registered traders that only traded with the EU. A separate estimate indicates there are approximately 100,000 non VAT-registered traders that trade only with the EU. The latest HMRC validated data shows that in the three months to 1 March 2019, which covers the period from the start of the business readiness campaign, there were 53,098 registrations for an EORI number, and numbers are growing each week.
As HMRC only holds information on UK-EU traders that are VAT-registered, a large population of traders would not automatically receive an EORI number if they were automatically generated. Providing numbers for some traders that needed it, but not all, would send mixed messages about whether it was required. Furthermore, the VAT registration details for a trader can be different from the trading entity that needs an EORI number, meaning automated registration could result in registering the wrong entity.
The Government has focused on ensuring the process of applying for an EORI is free and very quick, it currently takes around 10 minutes. The Government has also recently announced temporary simplified procedures to make importing and exporting easier. To register for these simplifications, traders will need a UK EORI number. Therefore, completing the application is a good first step for traders.
Asked by: Adrian Bailey (Labour (Co-op) - West Bromwich West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many of the 40,000 businesses who have registered for an EORI number (a) were and (b) were not already VAT registered.
Answered by Mel Stride - Shadow Secretary of State for Work and Pensions
UK traders that only trade with the EU will need an EORI number in the event the UK leaves the EU without a deal. HMRC estimated that in 2017 there were 144,000 VAT-registered traders that only traded with the EU. A separate estimate indicates there are approximately 100,000 non VAT-registered traders that trade only with the EU. The latest HMRC validated data shows that in the three months to 1 March 2019, which covers the period from the start of the business readiness campaign, there were 53,098 registrations for an EORI number, and numbers are growing each week.
As HMRC only holds information on UK-EU traders that are VAT-registered, a large population of traders would not automatically receive an EORI number if they were automatically generated. Providing numbers for some traders that needed it, but not all, would send mixed messages about whether it was required. Furthermore, the VAT registration details for a trader can be different from the trading entity that needs an EORI number, meaning automated registration could result in registering the wrong entity.
The Government has focused on ensuring the process of applying for an EORI is free and very quick, it currently takes around 10 minutes. The Government has also recently announced temporary simplified procedures to make importing and exporting easier. To register for these simplifications, traders will need a UK EORI number. Therefore, completing the application is a good first step for traders.
Asked by: Adrian Bailey (Labour (Co-op) - West Bromwich West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reason EORI numbers cannot be automatically allocated to intra-EU only traders with registered VAT numbers.
Answered by Mel Stride - Shadow Secretary of State for Work and Pensions
UK traders that only trade with the EU will need an EORI number in the event the UK leaves the EU without a deal. HMRC estimated that in 2017 there were 144,000 VAT-registered traders that only traded with the EU. A separate estimate indicates there are approximately 100,000 non VAT-registered traders that trade only with the EU. The latest HMRC validated data shows that in the three months to 1 March 2019, which covers the period from the start of the business readiness campaign, there were 53,098 registrations for an EORI number, and numbers are growing each week.
As HMRC only holds information on UK-EU traders that are VAT-registered, a large population of traders would not automatically receive an EORI number if they were automatically generated. Providing numbers for some traders that needed it, but not all, would send mixed messages about whether it was required. Furthermore, the VAT registration details for a trader can be different from the trading entity that needs an EORI number, meaning automated registration could result in registering the wrong entity.
The Government has focused on ensuring the process of applying for an EORI is free and very quick, it currently takes around 10 minutes. The Government has also recently announced temporary simplified procedures to make importing and exporting easier. To register for these simplifications, traders will need a UK EORI number. Therefore, completing the application is a good first step for traders.
Asked by: Adrian Bailey (Labour (Co-op) - West Bromwich West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how much of the £2 million allocated to helping traders to make customs declarations has been drawn down by traders upskilling their capacity to make customs declarations; how many grant funding applications have been made to that fund; and many traders have been successful in such applications.
Answered by Mel Stride - Shadow Secretary of State for Work and Pensions
This £2 million funding to support the cost of training is part of a wider £8 million investment to support the sector ahead of the UK leaving the EU, which includes a further £3 million in grant funding for IT improvements and £3 million which is being used to increase training provision in this area.
Applications are still being received, but as of 5 March 2019 124 applications have been submitted for the training grants available to customs intermediaries and traders who complete customs declarations. Applications are subject to a review process once submitted, and so far 43 training grants have either been offered or have already been paid.
Asked by: Adrian Bailey (Labour (Co-op) - West Bromwich West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how much of the £2 million allocated to helping traders to make customs declarations has been spent on (a) administering the scheme and (b) helping traders.
Answered by Mel Stride - Shadow Secretary of State for Work and Pensions
The £5 million grant fund, which includes the £2 million to support customs intermediaries and traders who complete customs declarations with the cost of training, does not include any administration costs. Any costs associated with administering the scheme are accounted for separately. The full £5 million grant fund is available for bids from intermediaries and traders.