Asked by: Ben Lake (Plaid Cymru - Ceredigion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of increasing the threshold above which businesses are liable to pay VAT.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Government recognises that accounting for VAT can be a burden on small businesses. This is why, at £85,000, the UK has a higher VAT registration threshold than any EU Member State and the second highest in the OECD. This keeps the majority of UK businesses out of VAT altogether.
Views on the VAT registration threshold are divided and the case for change has been regularly reviewed over the years. While some businesses have argued that a higher threshold would reduce administrative and financial burdens, others contend that a lower threshold would provide a fairer competitive environment.
It was announced at Autumn Budget 2022 that the VAT threshold will be maintained at its current level of £85,000 until 31 March 2026.
Asked by: Ben Lake (Plaid Cymru - Ceredigion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the Welsh Government will receive a Barnett consequential from the £500 million Local Authority Housing Fund announced by the Department for Levelling Up, Housing and Communities.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Barnett formula applies to changes in departmental DEL budgets, not when departments make spending or policy announcements. Funding for this programme was allocated as part of the Spending Review in 2021 so the Welsh Government has already received the associated Barnett-based funding as part of its own settlement.
The 2021 Spending Review set the largest annual block grant, in real terms, of any spending review settlement since the devolution Act. This provided £18bn per year for the Welsh Government. This settlement is still growing in real terms this year, and over the three-year spending review period, despite inflation being higher than expected.
The Welsh Government is well-funded to deliver all its devolved responsibilities, receiving around 20% more funding per person than equivalent UK Government spending in other parts of the UK. It is for the Welsh Government to allocate its funding as it sees fit in devolved areas.
Asked by: Ben Lake (Plaid Cymru - Ceredigion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the adequacy of restrictions on transfers from public sector pension schemes to defined contribution schemes.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government acknowledges that for unfunded Public Service Pension Schemes, outward transfers are limited under the Pensions Act 2015 to schemes where members cannot avail themselves of pension draw down flexibilities introduced by that Act. This is because draw down would increase the upfront cost of these unfunded schemes to taxpayers.
Where members move on from their public service employer, they can generally choose to become deferred members of their current pension scheme, which will see their rights in reformed 2015 Public Service Pension Schemes accrued up to this point fully price protected through continuing revaluations up to retirement.
Asked by: Ben Lake (Plaid Cymru - Ceredigion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with the Welsh Government on Corporate Joint Committees; and what progress has been made on ensuring that said committees are able to (a) reclaim VAT, (b) access borrowing via Public Works Loan Board, (c) access Debt Management Account Deposit facilities.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
Treasury officials engage regularly with the Welsh Government on a range of issues, including the Corporate Joint Committees (CJCs).
Bodies such as the CJCs can apply to HM Treasury for admission to VAT refund schemes. Applications are assessed based on objective criteria. The status of any applications that are made is a confidential matter between applicants, HM Treasury and HMRC.
HMT is committed to the Public Works Loan Board (PWLB) offering low-cost loans to local authorities. HMT has indicated to the Welsh Government earlier this year that we agree in principle with PWLB access being given to CJCs.
The Debt Management Office (DMO) provides the Debt Management Account Deposit Facility (DMADF) as part of its cash management operations designed to support local authorities' cash management. The DMO considers applications from eligible institutions. The current list of eligible institutions is published on the DMO’s website at https://www.dmo.gov.uk/responsibilities/money-markets/debt-management-account-deposit-facility-dmadf/#eligible_institutions
Asked by: Ben Lake (Plaid Cymru - Ceredigion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions his Department has had with local authorities using procurement processes to obtain banking services on the number of banks engaging in the procurement process.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The decisions about what products are offered and to whom, including Local Authorities, remain commercial decisions for banks and building societies and it would be inappropriate for Government to intervene in these decisions. The Government encourages Local Authorities to engage with banks regarding the services available.Asked by: Ben Lake (Plaid Cymru - Ceredigion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his department has taken to ensure that local authorities have access to adequate banking services.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The decisions about what products are offered and to whom, including Local Authorities, remain commercial decisions for banks and building societies and it would be inappropriate for Government to intervene in these decisions. The Government encourages Local Authorities to engage with banks regarding the services available.Asked by: Ben Lake (Plaid Cymru - Ceredigion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether people eligible for the tax-free childcare allowance can access that allowance before 31 days prior to a relevant leave period; and if he will make an assessment of the clarity of gov.uk guidance on that allowance, including in relation to adoption leave.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
People on all forms of parental leave (including maternity, paternity and shared parental leave) can continue to use Tax-Free Childcare for children other than the child that is the subject of the parental leave. They are not eligible for that child while on leave but can use Tax-Free Childcare from 31 days before returning to work, assuming they are expecting to return to work.
People on all forms of parental leave (including maternity, paternity and shared parental leave) can continue to use Tax-Free Childcare whilst on leave for children other than the child that is the subject of the parental leave. They are not eligible for that child while on leave but can use Tax-Free Childcare from 31 days before returning to work, assuming they are expecting to return to work.
Feedback on HMRC continually keep its guidance under review. Feedback on the Childcare Services pages of gov.uk HMRC guidance is positive. Online customer service results have been consistently over 92% over the last twelve months.
Asked by: Ben Lake (Plaid Cymru - Ceredigion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to advice published on the gov.uk website which states that people who are on adoption leave cannot apply for Tax Free Childcare in respect of the child for whom they are on Adoption Leave unless they are going back to work within 31 days of the date on which they first applied, whether that restriction also applies to those on shared parental, maternity or paternity leave.
Answered by Chris Philp - Minister of State (Home Office)
I can confirm the same rule applies to people on all forms of parental leave (including maternity, paternity and shared parental leave) unless they are expected to return to work within 31 days of the date in which their leave started. Parents remain eligible for Tax-Free Childcare for children other than the child that is the subject of the parental or adoption leave.
Asked by: Ben Lake (Plaid Cymru - Ceredigion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of recent increases in fuel prices on the efficacy of the Approved Mileage Allowance Payments rate.
Answered by Alan Mak - Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)
The Government sets the Approved Mileage Allowance Payment (AMAP) rates to minimise administrative burdens.
The current AMAP rates allow employees to claim up to 45 pence per mile for the first 10,000 miles and 25 pence for each subsequent mile, tax free if they use their private car or van for business purposes. An additional 5 pence per mile may also be claimed for every passenger transported.
AMAPs are intended to create administrative simplicity and certainty by using an average rate, which reflects vehicle running costs including fuel, depreciation, servicing, insurance, and Vehicle Excise Duty. As it is an average, the rate is necessarily more appropriate for some drivers than others.
Employers are not required to use the AMAP rates. Instead, they can agree to reimburse a different amount that better reflects their employees’ circumstances. If an employee is paid less than the AMAP rate, they can claim Mileage Allowance Relief (MAR) on the shortfall. However, where payments exceed the relevant AMAP rate, there will be an Income Tax and National Insurance charge on the difference.
The Government keeps the AMAP rates, like all taxes and allowances, under review and any changes are considered by the Chancellor.
Asked by: Ben Lake (Plaid Cymru - Ceredigion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has plans to review the Approved Mileage Allowance Payments rate.
Answered by Alan Mak - Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)
The Government sets the Approved Mileage Allowance Payment (AMAP) rates to minimise administrative burdens.
The current AMAP rates allow employees to claim up to 45 pence per mile for the first 10,000 miles and 25 pence for each subsequent mile, tax free if they use their private car or van for business purposes. An additional 5 pence per mile may also be claimed for every passenger transported.
AMAPs are intended to create administrative simplicity and certainty by using an average rate, which reflects vehicle running costs including fuel, depreciation, servicing, insurance, and Vehicle Excise Duty. As it is an average, the rate is necessarily more appropriate for some drivers than others.
Employers are not required to use the AMAP rates. Instead, they can agree to reimburse a different amount that better reflects their employees’ circumstances. If an employee is paid less than the AMAP rate, they can claim Mileage Allowance Relief (MAR) on the shortfall. However, where payments exceed the relevant AMAP rate, there will be an Income Tax and National Insurance charge on the difference.
The Government keeps the AMAP rates, like all taxes and allowances, under review and any changes are considered by the Chancellor.