Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what is their estimate of the tax relief that will be claimed on future payments made by companies to replace liability-driven investment asset losses in pension schemes, taking into account the Office for National Statistics' increased estimate for losses of £545 billion.
Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)
Defined benefit (DB) schemes in aggregate are now better funded, compared to a year ago. This is because of an increase in long-term Gilt yields, which affect the assumptions about the returns scheme trustees can expect on investments over time (though experience will vary among individual DB schemes). This improvement in funding levels takes into account any change in the reported value of schemes’ assets. As a result, no material increase in tax relief on employer contributions paid by the sponsors of such schemes is expected.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to assist businesses using director’s capital or loans rather than third party loans.
Answered by Lord Agnew of Oulton
The Government has set out an unprecedented package of support for all businesses to protect against the current economic emergency, including the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLS), which can all be accessed by directors.
CBILS is available to all viable UK-based businesses with a turnover of less than £45m. It is particularly suited to businesses looking to mitigate against short-term cash flow difficulties, for example by accessing bank lending and overdrafts. By providing an 80% government guarantee on finance facilities up to £5 million, this scheme will help more businesses access the finance they need.
No lender can take a personal guarantee for a loan of less than £250,000 that is supported by the Coronavirus Business Interruption Loan Scheme. For loans over the value of £250,000, a personal guarantee can only be taken for 20% of the outstanding balance. However, a lender is not allowed to take a personal guarantee against a borrower's principal residence under the scheme. So even if a personal guarantee is required under the lender's credit policy for loans over £250,000, it cannot be taken against the borrower's home.
As of 6 May, over 34,000 facilities had been approved under CBILS, supporting over £5.7bn of finance to SMEs.
BBLS launched on 4 May, offering loans from £2,000 up to £50,000 to businesses including sole traders, small partnerships and unincorporated associations. The Government will cover the first year’s interest payments, and no repayments are due by the borrower during this initial 12-month period. Thereafter, interest will revert to a fixed rate of 2.5%.
The Government has recognised that some businesses (e.g. sole traders) risk their personal assets, including their home, when borrowing as there is no distinction between their personal and business assets (as there would be for limited liability companies). Therefore, a sole trader’s primary residence and vehicle cannot be pursued should a borrower default on a loan in the BBL Scheme.
As of 6 May, nearly 160,000 facilities had been approved under BBLS, supporting almost £5bn of finance to SMEs.
CLBILS is available to all viable UK-based businesses with a turnover of more than £45m. The government is providing a guarantee of 80% on finance facilities up to £50m This scheme responds to concerns from businesses that are not eligible for CBILS.
As of 6 May, 48 CLBILS loans worth nearly £290m had been approved.
Further support available to businesses includes the Coronavirus Job Retention Scheme, business rate holidays and grants to SMEs. These measures will support thousands of businesses to get through this and emerge stronger on the other side
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether a care provider that is a (1) registered charity, (2) not-for-profit organisation, and (3) for-profit organisation, is required to pay value added tax when purchasing personal protective equipment.
Answered by Lord Agnew of Oulton
A zero rate of VAT is applied to certain purchases of specialist clothing and other specialist medical equipment by health bodies and charitable institutions that provide care or medical treatment. In terms of clothing, this covers specialist surgical masks, gowns and gloves. The items subject to the zero rate are set out in Section 3 of VAT Notice 701/6 “Charity Funded Equipment for Medical and Veterinary Uses”.
The Government announced on 30 April a temporary zero rate effective from 1 May until 31 July 2020 for supplies of Personal Protective Equipment (PPE) recommended for use in connection with protection from infection with Covid-19. The relevant PPE is set out in guidance published by Public Health England on 24 April 2020 titled “Guidance, COVID-19 personal protective equipment” and further guidance is available on GOV.UK.
Social care or welfare services are generally exempt from VAT. Organisations offering such services are not required to charge VAT where they are regulated by the Care Quality Commission. The exemption is explained in VAT Notice 701/2 “Welfare Services and Goods”.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether a care provider that is a (1) registered charity, (2) not-for-profit organisation, and (3) for-profit organisation is required to pay value added tax when purchasing medical supplies.
Answered by Lord Agnew of Oulton
A zero rate of VAT is applied to certain purchases of specialist clothing and other specialist medical equipment by health bodies and charitable institutions that provide care or medical treatment. In terms of clothing, this covers specialist surgical masks, gowns and gloves. The items subject to the zero rate are set out in Section 3 of VAT Notice 701/6 “Charity Funded Equipment for Medical and Veterinary Uses”.
The Government announced on 30 April a temporary zero rate effective from 1 May until 31 July 2020 for supplies of Personal Protective Equipment (PPE) recommended for use in connection with protection from infection with Covid-19. The relevant PPE is set out in guidance published by Public Health England on 24 April 2020 titled “Guidance, COVID-19 personal protective equipment” and further guidance is available on GOV.UK.
Social care or welfare services are generally exempt from VAT. Organisations offering such services are not required to charge VAT where they are regulated by the Care Quality Commission. The exemption is explained in VAT Notice 701/2 “Welfare Services and Goods”.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether a care provider that is a (1) registered charity, (2) not-for-profit organisation and (3) for-profit organisation, is required to charge value added tax on the services they provide to people.
Answered by Lord Agnew of Oulton
A zero rate of VAT is applied to certain purchases of specialist clothing and other specialist medical equipment by health bodies and charitable institutions that provide care or medical treatment. In terms of clothing, this covers specialist surgical masks, gowns and gloves. The items subject to the zero rate are set out in Section 3 of VAT Notice 701/6 “Charity Funded Equipment for Medical and Veterinary Uses”.
The Government announced on 30 April a temporary zero rate effective from 1 May until 31 July 2020 for supplies of Personal Protective Equipment (PPE) recommended for use in connection with protection from infection with Covid-19. The relevant PPE is set out in guidance published by Public Health England on 24 April 2020 titled “Guidance, COVID-19 personal protective equipment” and further guidance is available on GOV.UK.
Social care or welfare services are generally exempt from VAT. Organisations offering such services are not required to charge VAT where they are regulated by the Care Quality Commission. The exemption is explained in VAT Notice 701/2 “Welfare Services and Goods”.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Written Answer by Lord Bates on 22 February (HL5517), whether they are able to provide any examples, from the current centrally maintained list of non-departmental central government bodies, of other non-departmental central government bodies that have operated on the basis of expected status rather than actual status confirmed by the National Accounts Classification Committee; and if so, for how long those bodies operated before their status was confirmed.
Answered by Lord Bates
All bodies deemed to be in the central government sector by HM Treasury are included in the Governments Resource and Accounts Act 2000 (Estimates and Accounts) Order 2017[1]. All bodies that have been classified by ONS to the central government sector are included in their Public Sector Classifications Guide[2] . The differences between the two reflect entities that have not yet been formally classified by ONS’s Economic Statistics Classification Committee but following HMT
[1] http://www.legislation.gov.uk/uksi/2017/310/contents/made
[2] https://www.ons.gov.uk/methodology/classificationsandstandards/economicstatisticsclassifications/introductiontoeconomicstatisticsclassifications
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Written Answer by Lord Henley on 1 February (HL4990), what other examples there are of non-departmental central government bodies that have operated on the basis of expected status rather than actual status confirmed by the National Accounts Classification Committee; and if there are such examples, for how long those bodies operated before their status was confirmed.
Answered by Lord Bates
Information is not held centrally relating to a full historic list of central government bodies that have operated on the basis of expected status rather than actual status, as confirmed by the Office for National Statistics (ONS).
In the absence of an ONS classification, the Treasury can advise on sector classification (i.e. whether a body is in or outside central government). Where the ONS has not yet taken a decision on a body, it will be considered to be within Central Government if it appears to fit the criteria for classification as a ‘central government’ body.