Jesse Norman
Main Page: Jesse Norman (Conservative - Hereford and South Herefordshire)Department Debates - View all Jesse Norman's debates with the HM Treasury
(4 years, 8 months ago)
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Kate Green (Stretford and Urmston) (Lab)
The Financial Secretary to the Treasury (Jesse Norman)
The review of the off-payroll working rules reform was announced on 7 January 2020. The reform is due to be extended to medium and large-sized organisations in all sectors from 6 April. It is determining whether any further steps can be taken to ensure smooth and successful implementation, and a series of roundtables with stake- holders has already been conducted. The review will conclude by mid-February, after which recommendations will be made public.
Jessica Morden
With the roll-out of IR35 in the private sector fast approaching, there is already concern that companies are making blanket determinations, forcing genuine contractors into contracts that tax them as employees but with no employment rights. Ahead of the protest here tomorrow, will the Government listen, pause the process and work with the industry to do a proper review?
Jesse Norman
The hon. Lady may be aware that we have already made a small but important change to the roll-out as a result of the review. We are not aware of blanket determinations being made, although it must be said that many firms are choosing to acknowledge disguised employment and bring those contractors in-house. The hon. Lady should also be aware that there are various routes by which determinations can be challenged, including, if necessary, a submission under the income tax self-assessment process, for a final determination.
Kate Green
We all want to crack down on tax avoidance but legitimate contractors in my constituency face uncertainty about their status and tax liability thanks to unclear HMRC guidance and the unreliability of CEST—check employment status for tax—and the firms they work for are cancelling contracts because of the confusion. What is the Minister doing to address their concerns?
Jesse Norman
We are conducting a review to ensure that this is as smooth as possible. We recognise that there is difficulty here. Some 18 months have passed since the original reform of status determination was announced and in that process we have had a consultation, draft legislation and further discussions and consultation, and we are having a further review now to make sure it is properly and smoothly rolled out.
Sir Desmond Swayne (New Forest West) (Con)
Against how many of the pillars of taxation did the Economic Affairs Committee in the other place judge the 2010 legislation on the loan charge to have failed?
Jesse Norman
We have a question about the loan charge later on, so I look forward to my right hon. Friend’s further question then. He can answer on the number of pillars because I am sure he has scrutinised the Committee’s hearings very carefully. What I can tell him is that the fundamental principle of tax is that it should be properly collected from people who owe it and who may be avoiding it, and that is what this is designed to do.
Martyn Day (Linlithgow and East Falkirk) (SNP)
The Financial Secretary to the Treasury (Jesse Norman)
I thank the hon. Gentleman for his question about e-publications and see by the way, Mr Speaker, that your predecessor Speaker Bercow’s book, aptly named “Unspeakable: the Autobiography” has just been published. Apparently it is an online bestseller in the rather surprising, slightly niche category of blues musician biographies. Unlike many other e-books, it is considerably cheaper than the book itself; whether that will remain so is not clear. I do not know whether you have had a chance to peruse the work, Mr Speaker, but if you have, I am sure you will agree that no reader would have their appetite to read it affected by a reduction in tax. What this brings out is that the pricing of e-books is a commercial decision, and it is far from clear whether changing the tax would affect that decision.
Martyn Day
I thank the Minister for his entertaining answer. Scottish National party Members are very disappointed that the last Government refused to back our demands to remove VAT from electronic publications. So with the Budget only a month away, will he consider a change of policy so that at the very least, online children’s books and academic journals can become more affordable?
Jesse Norman
The hon. Gentleman is absolutely right that there are benefits associated with extending the zero rate of VAT in this area, as in others. The task for Government is to work out what is the right thing to do, all things considered. All I can say is that we have responded to the Cairncross review in part of this area, and we continue to keep all taxes under review, especially in the lee of a budget.
Michael Fabricant (Lichfield) (Con)
While agreeing with the point made for the SNP by the hon. Member for Linlithgow and East Falkirk (Martyn Day), does the Minister not find it somewhat ironic that the only way we can reduce the rate of VAT to zero is through Brexit, yet the SNP wishes to remain in the EU, and we would therefore not be able to reduce VAT if that were the case?
Jesse Norman
That is a very telling point, and I draw the House’s attention to the parallel issue of sanitary products for women, on which I am pleased to say we will be able to act after we have left the EU.
Bambos Charalambous (Enfield, Southgate) (Lab)
Mr Laurence Robertson (Tewkesbury) (Con)
The Financial Secretary to the Treasury (Jesse Norman)
Of the estimated 50,000 individuals affected by the loan charge, the Government currently estimate that more than 30,000 will benefit from the changes. That includes about 11,000 people who will be taken out of paying altogether. In addition, individuals who have settled or who are settling their tax liability with Her Majesty’s Revenue and Customs will be out of scope of the charge.
Seema Malhotra
Neither the law nor HMRC made clear the position regarding loans and self-employed people. Indeed, it was not until 2016 that it was announced that the law would be changed to include the self-employed and others who did not even find out until a year or two later, such as my constituent Dhruv Salotra. Will the Financial Secretary do the obvious thing, get rid of all retrospection and apply the loan charge from when the law was clear and applied to everyone, including the self-employed, and, in addition, clamp down on those who promoted these disguised renumeration schemes in the first place?
Jesse Norman
The hon. Lady is absolutely right that it is important to crack down on promoters, and at the Budget we will bring forward a package about how to do that. Her wider point, however, is wrong: this is not a retrospective measure. It is also true that the Government have to some extent been vindicated by Sir Amyas Morse, who found that the loan charge was an appropriate way to respond to tax avoidance and, after detailed argumentation, suggested a date in December 2010 as the correct date from which to date the legality of it.
Mr Robertson
But even 2010 is 10 years ago, so if the law was clear then, as the report suggests, why did HMRC not act then? Surely this matter is its responsibility.
Jesse Norman
HMRC did pursue these cases quite vigorously. Sir Amyas found, on the basis of detailed consideration, that the law was clear then, and therefore HMRC rightly believed that people would accommodate it. Of course, it pursued people who had been avoiding tax through disguised renumeration schemes for many years before that, and it will continue to do so for those that have been carved out by the loan charge review.
Ruth Cadbury (Brentford and Isleworth) (Lab)
The Treasury has accepted some of Sir Amyas Morse’s recommendations, but there is confusion about some of them. A constituent of mine got caught in a disguised renumeration scheme before 2010, and yet he is still not convinced that he is in the clear and has that fear hanging over him. What does the Financial Secretary have to say about that?
Jesse Norman
The hon. Lady is quite wrong. We accepted all but one of Sir Amyas’s recommendations, and we did not accept that one because the issue he raised was already being handled very well within the system. If the hon. Lady has a specific concern, she is very welcome to raise it with tax commissioners or, indeed, with me, although on an anonymised basis because obviously I cannot deal with specifics.
Alan Mak (Havant) (Con)