Oral Answers to Questions

Debate between Jesse Norman and Sammy Wilson

Tuesday 7th September 2021 Commons Chamber

[Jesse Norman]

I thank my hon. Friend for his question. I have mentioned the extra care and support that HMRC has put in place. I have mentioned the extremely careful approach that it has taken with people who may be facing the loan charge. As he will be aware, it has not initiated insolvency proceedings against any taxpayer for a loan charge debt and that in itself is emblematic of the care and attention that it is taking with this subject.

[Sammy Wilson (East Antrim) (DUP)]

It is not enough for the Minister to say that people had to take responsibility for their own tax affairs when the information that they were given by HMRC was that there was nothing wrong with these schemes initially, when HMRC passed and signed off tax years for people, and when the head of HMRC has admitted that, in recent months, he had repeatedly tried—this was the outcome of a freedom of information request—to obtain legal analysis to understand the strength of a claim with “very little success”. There is not even a legal standing for this. How then can the Minister say that it is right to pursue people for things that they were led into, and, indeed, for payments that HMRC was regularising by allowing contractors to use as a means of paying their employees?

[Jesse Norman]

The right hon. Gentleman raises a whole bunch of questions. Let me address them. There were some contractors working through agencies for HMRC. Where it was discovered that they had used disguised remuneration, those relationships were ended and strong measures have been put in place to prevent recurrence. That is an unfortunate feature of the extended way in which these contract arrangements sometimes work. I do not think that there is any evidence that HMRC has signed off or positively approved the use of any disguised remuneration scheme. If the right hon. Gentleman has an example, he is welcome to send it to me. The right hon. Gentleman will be aware that the chief executive of HMRC has specifically written to the loan charge and taxpayer fairness all-party parliamentary group to make it perfectly clear that it has taken those remarks out of context and that what he was doing—as every chief executive of a public agency should do—was putting his own officials under some pressure to provide the justification needed, and rightly so.

Finance Bill

Debate between Jesse Norman and Sammy Wilson

Report stage & 3rd reading
Monday 24th May 2021 Commons Chamber

[Jesse Norman]

I beg to move, That the Bill be now read the Third time.

I thank right hon. and hon. Members who have contributed to the robust but, I would say, good-natured debate throughout this Finance Bill’s passage over the past two months. It has been a speedy but thoroughly effective process. Before I get into the bulk of my speech, I know that the right hon. Member for East Antrim (Sammy Wilson) wants to put a question to me, so let me recognise him.

[Sammy Wilson]

I thank the Minister for giving way. I tried to catch his eye earlier on; I do not think that he is deliberately avoiding me, but I did not get the chance to talk to him. New schedule 1 refers to VAT on distance selling. It covers 55 pages and was introduced tonight without much chance of consideration. It will affect businesses with a threshold of sales of £8,818, which will require them to register and to do special accounting. What assessment has been made of the likely impact of that on small businesses in Northern Ireland that sell goods into the EU?

[Jesse Norman]

I rather regret it, having invited the intervention. No, of course, to engage with this, I would not have recognised the right hon. Gentleman if I had not wanted to take the intervention and I certainly was not avoiding him earlier in the debate. He is right to point out that these provisions have been put into the Bill for the first time. I am pleased to say that they have been given proper consideration in the detail that has been put up, which he alluded to. There is a new measure relating to the distance selling threshold, which will affect a small number of businesses in Northern Ireland. By and large, this put into law, in relation to Northern Ireland, a set of measures that has already been adopted elsewhere in the United Kingdom, in recognition of commitments that we made to the EU as part of the process of striking our new trade arrangements. That is that, but if he wishes to have further conversation on that, I would of course be delighted to do so.

This Finance Bill comes at a crucial juncture for our economy and our public finances as the UK recovers from what is—we must never forget this—the greatest economic and social crisis since world war two and the greatest economic recession in 300 years. It delivers on the measures announced in the Chancellor’s Budget to protect jobs and livelihoods and to provide additional support to help people and businesses through the pandemic; to begin the process of fixing the public finances; and to lay the foundations of a resilient future economy. This Bill delivers on all those commitments, and I commend it to the House.

Finance (No. 2) Bill

Debate between Jesse Norman and Sammy Wilson

Committee stage & Committee of the Whole House (Day 1)
Monday 19th April 2021 Commons Chamber

[Jesse Norman]

I rise to speak in support of clauses 109 to 111, schedules 21 and 22 and amendments 43 to 52.

The clauses will act in support of the Government’s freeports programme, which is designed to unlock investment in eight regions of England so far, with more to follow in the devolved Administrations. At Budget, following an open and transparent bidding process, the Chancellor announced the locations successful in securing freeport status: East Midlands airport, Felixstowe and Harwich, Humber, Liverpool city region, Plymouth and South Devon, Solent, Teesside, and Thames.

Freeports will be national hubs for international trade, innovation and commerce, regenerating communities across the UK by attracting new businesses and spreading jobs, investment and opportunity. They will bring together ports, local authorities, businesses and other key local stakeholders to achieve a common goal of shared prosperity and opportunity for their regions. In doing so, they will help in the Government’s ambition—indeed, all of our ambition—to level up areas that have been left behind.

The Government’s freeports model enables the UK to take advantage of the benefits of leaving the European Union. The Government have drawn on examples of successful freeport programmes all over the world to develop freeports that will attract significant new investment and encourage development across the UK. The model will enable businesses in freeports to draw on benefits relating to customs, planning, regeneration and innovation, as well as the offer of targeted tax reliefs supported by the clauses in the Bill.

The Government have engaged extensively with ports, local authorities and industry, including through a consultation on the wider programme running between 10 February and 13 July 2020. We have also listened to feedback from a wide range of stakeholders to inform the development of an effective model that will benefit port areas across the UK.

For the reasons already outlined in the earlier debates, I will confine my remarks to the key points at issue. Clauses 109 to 111 give the Government the power to designate tax sites and, once sites have been designated, to provide relief within those sites for the acquisition of commercial purpose property and new plant and machinery assets, as well as relief on the construction or renovation of buildings.

[Sammy Wilson]

So far, no freeport has been designated in Northern Ireland, but one of the great fears is that because Northern Ireland remains within the single market rules of the EU, any such measures to set up a freeport could be contested by the EU and the Irish Government because they might give Belfast an advantage over Dublin, for example. How will that issue be resolved, given the terms of the Northern Ireland protocol?

Finance (No. 2) Bill

Debate between Jesse Norman and Sammy Wilson

2nd reading
Tuesday 13th April 2021 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

I beg to move, That the Bill be now read a Second time.

As you will be aware, Mr Deputy Speaker, the scrutiny of Finance Bills has lain at the centre of our parliamentary process for many centuries, ever since its origins in the 13th century, and it is a rare honour for me to bring this Bill forward today.

At the beginning of last month, my right hon. Friend the Chancellor of the Exchequer outlined a Budget with three key objectives: first, to protect jobs and livelihoods and provide additional support to get the British people and British businesses through the pandemic; secondly, to be clear about the need to fix the public finances once we are on the way to recovery and to start that work; thirdly, as we emerge from the pandemic, to lay the groundwork for a robust and resilient future economy. This Finance Bill enacts changes to taxation that support all those objectives.

I will come to the Bill itself shortly, but before I do so I want to pay tribute again to the work of the Treasury and Her Majesty’s Revenue and Customs over the past year and more. I can testify from personal experience that officials have worked around the clock throughout that period to get the covid schemes up and running, to make sure that they are as effective as possible, to tweak and extend them where they can and, by those means, to support millions of people and hundreds of thousands of businesses up and down the United Kingdom in the face of the worst peacetime economic crisis in recorded history. I will not say that this was their finest hour; they will have had many of those, as these are institutions that are arguably nigh on 500 years old. None the less, this has certainly been a time to which future historians will look back when they seek examples of exemplary public service.

It has been a privilege to work alongside officials at both Her Majesty’s Treasury and Her Majesty’s Revenue and Customs, and to see the great machinery of government working so well. I will, if I may, add one other word of scene-setting about the wider approach that we have taken to tax. It is a measure of the approach taken by the Treasury and HMRC and of our own strategic approach as a Government that, alongside these pandemic measures, we have also accelerated work to create a more effective and resilient tax system. Our goal, in simple terms, is to enhance the stability and effectiveness of the UK tax system, using last year’s announcement of a new 10-year tax administration strategy as the springboard.

We want a tax system that enhances productivity, especially across the long tail of our small and medium-sized businesses. Digitisation of the tax system provides a useful nudge to these firms to upgrade their use of information technology and the skills that it demands. We want a tax system that is more flexible, so that it is better able to adapt quickly to changing circumstances and to provide targeted support for businesses and individuals when needed. We want a tax system that is more resilient—both resilient itself and better equipped to strengthen the core resilience of the UK economy in the face of a future crisis. That transformation of our tax system is already under way, but, as the House will know, we have also taken steps to improve the process of tax policy development, most recently with the tax policies and consultations day we held on 23 March. By giving this wide array of consultations more profile, we hope to make the tax policy process still more collaborative and transparent and improve the quality of tax policy making.

Let me turn to the Bill. The House is well aware of the massive public health and economic shock that this country has experienced. The damage done by coronavirus to our economy and our society has been severe. More than 700,000 people have lost their jobs since March last year. The economy has shrunk by 10%, the largest fall in more than 300 years, and this country’s borrowing is the highest it has ever been outside wartime.

The Government’s response has been comprehensive and sustained, with the total package of support to the economy this year and next now estimated at £407 billion. That response is already showing its value. Thanks to that and to the rapid roll-out of vaccination, the Office for Budget Responsibility and other independent authorities now expect a swifter recovery than previously anticipated, with faster growth, lower unemployment, more investment and higher household incomes. Indeed, the OBR expects the UK economy to recover to its pre-crisis levels six months earlier than it did—in the second rather than the fourth quarter of 2022. In the words of the Resolution Foundation, if realised, this projected rate of unemployment,

“would be by far the lowest unemployment peak in any recent recession, despite this being the deepest downturn for 300 years.”

At the heart of our covid response is precisely that support for jobs, delivered through Her Majesty’s Revenue and Customs as the tax authority, with more than 11 million jobs furloughed between the beginning of the pandemic in March last year and February of this year. As the OBR outlined last month, without the additional measures at Budget, which included the extension of the coronavirus job retention scheme, unemployment would have peaked two quarters earlier and at a higher level. Indeed, it estimates that there would have been an additional 300,000 unemployed people in the fourth quarter of this year without these latest interventions.

The tax measures outlined in the Bill go further now to protect jobs and support the economy. We are extending the 5% reduced VAT rate until 30 September in order to protect 150,000 hard-hit hospitality and tourism businesses, which employ almost 2.5 million people. To help those businesses manage the transition back to the standard rate, VAT will then increase to an interim rate of 12.5% from October until the end of March.

For similar reasons, the Bill puts into legislation the temporary cut in stamp duty land tax with a residential SDLT nil rate band remaining at £500,000 in England and Northern Ireland until the end of June. This, again, will be followed by a phased transition back to the normal rate. From 1 July 2021, it will fall to £250,000 until the end of September, before returning to £125,000 on 1 October.

For any business that took advantage of the original VAT deferral new payments scheme, the Bill ensures that they will be able to pay that deferred VAT in up to 11 equal payments from March 2021, rather than by one larger payment due by 31 March 2021. For those businesses that have been pushed into losses, the trading loss carry-back rule is being extended from the existing one year to three years for losses of up to £2 million, which will deliver a significant cash-flow benefit for businesses.

As well as protecting jobs and livelihoods, the Bill takes important steps to strengthen the public finances. The damage done by coronavirus and the urgent need to respond to the crisis have created huge challenges for the Exchequer. The OBR’s fiscal forecasts show that this year the UK is expected to borrow a record amount: £355 billion. That is 17% of our national income—the highest level of borrowing since world war two. Borrowing is forecast to be £234 billion next year, which is 10.3% of GDP—an amount so large that it has only one rival in recent history, which is the level of borrowing this year.

It is our responsibility as a Government to balance the extraordinary support we are providing to the economy now with the need to start to fix the public finances, and the Bill strikes that balance.

First, the income tax personal allowance rises with the consumer prices index as planned to £12,570 from this month and will then be maintained at this level until April 2026. The House will recall that the UK has the highest basic personal tax allowance of any G20 country. A typical basic rate taxpayer now pays over £1,200 less in tax than in 2010. The higher rate threshold also rises to £50,270 from this month and will then be maintained at this level until April 2026. These changes are fair and progressive. It is important to note that the 20% highest income households will contribute 15 times that of the 20% lowest income households. An average basic rate taxpayer will be less than a pound a week worse off in 2022-23.

Secondly, the inheritance tax thresholds, the pensions lifetime allowance and the annual exempt amount in capital gains tax will also be maintained at their 2020-21 levels until April 2026. Maintaining the pensions lifetime allowance at current levels affects only those with the largest pensions—those worth more than £1 million.

Thirdly, the Government are providing businesses with over £100 billion of support to get through this pandemic, so our judgment has been that it is only fair to ask them to contribute to this overall recovery. The Bill therefore legislates for the rate of corporation tax paid on company profits to increase to 25% from 2023. Since corporation tax is charged only on company profits, businesses that may be struggling will, by definition, be unaffected.

The Government are also protecting small businesses with profits of £50,000 or less by creating a small profits rate, maintained at the current rate of 19%. The effect of this is that 70% of companies, or 1.4 million businesses, will not see an increase in their tax rate. There is also a taper above £50,000 so that only businesses with profits of a quarter of a million pounds or greater will be taxed at the full 25% rate—and that is itself still the lowest corporation tax rate in the G7. The increase is two years away, well after the point when the OBR expects the economy to have recovered, but it is important to legislate for this now in order to give businesses clarity about our future plans.

The next goal of this Budget has been to lay the foundations of our future economy as we emerge from the pandemic. If that economy is to support the creation of new jobs, to spur growth and to drive productivity forward, we need to encourage business investment now, so this Bill contains a highly innovative new super deduction measure, which is expected to lift the net present value of the UK’s plant and machinery allowances from 30th among the countries of the OECD to first.

In most cases, this measure will allow companies to reduce their taxable profits by 130% of the cost of investment they make, equivalent to a tax cut of up to 25p for every pound they invest. The super deduction is expected to be worth £25 billion during the two years it is in place, which would make it the biggest business tax cut in modern British history. The OBR has said that, at its peak in the financial year 2022-23, the super deduction is expected to bring forward an additional 10% of business investment, with a value of £20 billion.

Alongside a programme of national recovery, we also want to stimulate regional recovery. That is why this Bill also enables the Government to designate tax sites for freeports in Great Britain. Once approved, eligible businesses will be able to benefit from a number of tax reliefs, including an enhanced 10% rate of structures and buildings allowance, an enhanced capital allowance of 100% for companies investing in plant and machinery, and full relief from stamp duty land tax on the purchase of land or property—and to help them to invest and grow, the Bill maintains the annual investment allowance at the higher level of £1 million until the end of this year.

The House will also recall that these measures are supplemented by the Budget’s new Help to Grow: Digital scheme, which will assist smaller businesses in developing their digital skills by giving them free expert training and a 50% discount on new productivity-enhancing software. This is all part of a package that the Institute of Directors has called

“a big win for SMEs.”

[Sammy Wilson (East Antrim) (DUP)]

It is significant that no freeport sites have been allocated in Northern Ireland. Will the Minister clarify whether all the measures that will be included in freeport status will be exempt from the state aid rules, which will still apply in Northern Ireland because of our association with the EU single market rules?

[Jesse Norman]

I am grateful to the right hon. Gentleman for his question. He will know that it is absolutely the Government’s intention to have a freeport in Northern Ireland, and that they are in discussion with officials and members of the Northern Ireland Executive to discuss precisely how it will work. I am not in a position to comment on how it will work, but certainly the expectation is that this should be a functioning, highly successful and effective freeport. It should enjoy a very attractive set of benefits that will benefit the companies involved and be comparable to the ones we will see elsewhere, although it is important to note that freeports are themselves a mixed bag. We have had a variety of different bids of different kinds to the competition that has been run.

All the measures we have taken in relation to business growth and investment are part of a package, which the Institute of Directors has called

“a big win for SMEs.”

I was also pleased to see that the Resolution Foundation said that the Budget

“rightly sought to boost the recovery before turning to fixing the public finances”.

That is an important point.

I have discussed the work we are doing to create a more flexible and resilient tax system, but the Finance Bill also includes important measures to make it fairer and more sustainable. As part of the United Kingdom’s commitment to be a global leader on tax transparency, the Bill allows for the implementation of OECD reporting rules for digital platforms. The rules will help taxpayers in the sharing and gig economies to get their tax right. It will also help HMRC to detect and to tackle non-compliance.

To build on the successful introduction of Making Tax Digital for VAT, the Bill will enable the extension of MTD requirements for smaller VAT businesses from April next year. It also makes widely welcomed reforms to the penalty regime for VAT and income tax self-assessment, so that it is fairer and more consistent as a system, and harmonises interest for VAT and income tax.

The Bill tackles promoters of tax avoidance through strengthening existing anti-avoidance regimes and tightening rules. Importantly, it introduces an exemption from income tax for financial support payments for potential victims of modern slavery and human trafficking, made by the UK Government and devolved Administrations.

Finally, let me turn briefly to how the Bill helps us to deliver the important commitments the Government have made on the environment and on carbon reduction. The new plastic packaging tax, first announced at Budget 2018, will encourage the use of recycled plastic instead of new plastic in packaging. For plastic packaging that contains less than 30% recycled plastic content, the rate of the tax will be £200 per tonne. This will transform the economics of sustainable packaging.

The last 12 months have delivered a grave shock to this country and its economy, but the Government have met that shock with a determined and sustained response. That work is not done. With this Finance Bill, we are continuing to support the lives and livelihoods of families and businesses up and down the land, while simultaneously setting the terms for an investment-led recovery. The Bill puts in place the foundations for a fairer and more sustainable tax system. It further enshrines commitments on the environment and the work we are doing to tackle climate change, and it begins the work to rebuild the public finances. For those reasons and more, I commend it to the House.

Exiting the European Union (Value Added Tax)

Debate between Jesse Norman and Sammy Wilson

Wednesday 3rd February 2021 Commons Chamber

[Jesse Norman]

I am grateful to all right hon. and hon. Members who contributed to the debate, which has been constructive and useful. I am also grateful to the Opposition for their support for this measure, and to the Scottish National party.

The hon. Member for Ealing North (James Murray) asked about the assessment of the impact of these measures on the income tax—I think he means VAT—base. Of course, being a diligent soul, he will undoubtedly have carefully cosseted the tax impact and information note and seen that no significant impact is expected from this, because the VAT will have been recovered in any case by a VAT-registered business, or would have been recovered otherwise. This set of measures in many ways merely restores the status quo. He asked a question that was indirectly raised by the hon. Member for Strangford (Jim Shannon), about, as it were, potential confusion in Northern Ireland. The trader support service is functioning, in relation to advising on imports, extremely well overall. It has been heavily supported by the UK Government, as the hon. Member for Ealing North will know, and offers what is in effect a globally unique facilitation and intervention.

The hon. Member for Glenrothes (Peter Grant) was very free in accusing the Government of incompetence, as is the way with his party. Knowing that he would wish to be competent himself, I encourage him to read the tax impact and information note. He will know that these measures are already in the protocol and are therefore already, as it were, incorporated via the protocol in UK law. No new impacts are expected from the legislation, as those tax impact and information notes set out.

My right hon. Friend the Member for Wokingham (John Redwood) asked whether VAT rules will be administered and enforced by the UK Government. They will, through Her Majesty’s Revenue and Customs. He rightly raised wider concerns about Northern Ireland and some of the events we have seen in the last few days. I would refer him and all Members to the comprehensive remarks made by the Chancellor of the Duchy of Lancaster yesterday in response to the urgent question on the topic. He also asked whether there would be easy movement. He will know that we have put in place unfettered access for Northern Irish exports into Great Britain and a very comprehensive set of measures to support and facilitate imports into Northern Ireland and to reduce any possible administrative burden.

[Sammy Wilson]

rose—

[Jesse Norman]

The right hon. Member for East Antrim (Sammy Wilson) wishes to intervene, so I invite him to do so before I come to his remarks.

[Sammy Wilson]

I thank the Minister for giving way, and I hope he will address some of the points I raised. It is right that HMRC will be in charge of the collection of VAT, but one of the problems appears to be that, while we have the trader support service in Northern Ireland—which in most cases, but not always, has been helpful in giving advice to businesses there—many businesses in GB have not had the same level of information. One of the reasons why some of those businesses are saying that they are not going to sell to Northern Ireland is simply that they believe that the processes are so complicated, and they have no support by either having that clarified or being assured that the customs declarations and all the other paperwork will not be as complicated as they think it will be.

[Jesse Norman]

It is very easy to overstate the complexity of the issues involved. In the cases that the right hon. Gentleman mentions, the Northern Irish partner has full access to the trader support service, and the Great British partner has a comprehensive amount of guidance online, so the two come together. Inevitably, people will take some time to get used to what is, after all, a change in the arrangements. He is right to pick up the point about the effectiveness of the TSS. I do not think there is a suggestion that the support that businesses have been given in terms of information is anything less than comprehensive.

The right hon. Member for East Antrim asked about do-it-yourself builders. I can confirm that no further information will be required from do-it-yourself house builders, who will file a single VAT return. Obviously, they will be subject to the same proof of payment as they would have been before. In general, the point of this scheme is that without it, they would not be able to deduct acquisition VAT as they could prior to the end of transition period. Through this scheme, they can continue to recover the same VAT as they could before, therefore it is thoroughly to be welcomed.

The right hon. Member for Orkney and Shetland (Mr Carmichael) asked about VAT RES. I am very sorry, but that was in the wrong debate. If he had held his horses, he could have raised that in the next debate, or he could have raised it—equally inappropriately—in the previous debate, which I see he was down to speak in. The good news is that my hon. Friend the Exchequer Secretary will address these issues comprehensively in the debate to follow.

On the issue of small exporters, exports are zero-rated in relation to the UK, and they are not the principal topic of the legislation that we are discussing. The right hon. Member for Orkney and Shetland will be aware that there are measures coming from the EU in July, as I understand it, in relation to these matters that will to some extent—we wait to see the detail—mirror the facilitations that have been put in place, and they will hopefully support exporters from his constituency into the EU.

My hon. Friend the Member for North West Durham (Mr Holden) again raised the question about jobs and revenue. He will see that the tax information impact note does not expect there to be a significant material difference with regard to these issues, but there might, of course, have been some impact had we not put the facilitations in place and therefore these preserve the status quo, and rightly so.

I have already touched on some of the issues relating to the confusion over VAT that was raised by the hon. Member for Strangford). As he knows, in relation to imports, we have the Trader Support Service and, in relation to exports, there is comprehensive guidance available for anyone seeking to export.

Question put and agreed to.

Resolved,

That the Value Added Tax (Miscellaneous Amendments to Acts of Parliament) (EU Exit) Regulations 2020 (S.I., 2020, No. 1312), dated 18 November 2020, a copy of which was laid before this House on 19 November, be approved.

Resolved,

That the Value Added Tax (Miscellaneous Amendments to the Value Added Tax Act 1994 and Revocation) (EU Exit) Regulations 2020 (S.I., 2020, No. 1544), dated 18 December 2020, a copy of which was laid before this House on 21 December, be approved.—(Jesse Norman.)

Taxation (Post-transition Period) (Ways and Means)

Debate between Jesse Norman and Sammy Wilson

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 8th December 2020 Commons Chamber

[Jesse Norman]

My right hon. Friend will be aware that under the terms of the Northern Ireland protocol, we have agreed arrangements for Northern Ireland with the European Union. The goal of the legislation is to make sure that, as far as possible, it is a completely seamless and straightforward process for those who are trading and that it is unfettered in regards to trade from Northern Ireland into Great Britain. That seems to me to be a very important technical fact.

[Sammy Wilson (East Antrim) (DUP)]

On the VAT issue, which comes to the sovereignty issue once again, under article 8 of the Northern Ireland protocol, Northern Ireland traders will be subject to not just UK VAT rules, but EU VAT rules. Do the provisions that the Minister is now putting forward exempt Northern Ireland traders from being subject to dual VAT rules, given the costs that that would present and the huge administrative issues which would arise from it?

[Jesse Norman]

We do not expect the vast majority of any trade into Northern Ireland to be subject to any dual VAT arrangements. The whole purpose of these rules is to put in place the simplest and most straightforward arrangements that can be put in place and that replicate in so far as possible the current experience that people will have when they trade with the EU.

[Sammy Wilson]

Will the Minister give way?

[Jesse Norman]

I will give way once more, and then I will make some progress.

[Sammy Wilson]

The Minister has said that he would not expect that Northern Ireland traders will be subject to VAT rules of another jurisdiction, but article 8 of the protocol makes it clear that they will be subject to a dual VAT regime. Do these provisions remove that requirement from all traders in Northern Ireland, or are we giving away some of our sovereignty by accepting that some parts of the United Kingdom and some sectors in that part of the United Kingdom will be subject to VAT rules from another jurisdiction?

[Jesse Norman]

I am afraid that inadvertently the right hon. Gentleman has misrepresented my position, or misdescribed my position. I am saying that we are following the Northern Ireland protocol and, therefore, following any provisions that he refers to, but what we are doing is putting in place mechanisms that make them as easy and as facilitated as possible, so that the experience of someone trading in Northern Ireland should be as close as possible to that which they would have today.

The Bill will allow us to amend or modify certain provisions in relation to VAT and excise, including mechanisms to ensure that, in so far as possible, VAT will be accounted for in the same way as it is today, as I have said. In addition, it will make provision for amending current legislation for excise duty. Most of these changes are necessary to ensure that there is comprehensive VAT and excise legislation in place in relation to Northern Ireland at the end of the transition period.

In addition to those steps, there is also a small number of other taxation measures that need to be in place before the end of the transition period. They include provision for an increase in the rate of duty on aviation gasoline, which will apply across the UK. Otherwise known as avgas, the fuel is a form of leaded petrol predominantly used in private aviation.

Oral Answers to Questions

Debate between Jesse Norman and Sammy Wilson

Tuesday 1st December 2020 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

Her Majesty’s Revenue and Customs are aware of 15 contractors who have used disguised remuneration schemes while engaged either by the department or by Revenue and Customs Digital Technology Services. In each of the cases, the contractors were engaged via an agency or a company providing this service. It is important to be clear that Revenue and Customs does not engage in or enter into disguised remuneration schemes. It is possible for a contractor providing services to HMRC to use a disguised scheme without the department’s knowledge or by participation through a third party.

[Sammy Wilson]

I am amazed at the Minister’s answer—that firms can use methods of payment that HMRC then declares to be illegal and that no checks have been done by HMRC on those contractors. Does he not accept that it is unfair to put the burden on taxpayers who first of all entered into payments through disguised remuneration because we were forced to do so, and who declared that on tax returns which HMRC did not challenge, yet HMRC is now telling us that it did not even check that contractors it employed were paying in that way? How many of these contractors have HMRC actually pursued for forcing employees to use schemes that have been deemed illegal?

[Jesse Norman]

I think the right hon. Gentleman is slightly unclear on this. HMRC takes careful steps to ensure that the people whom it deals with as agencies employ on a proper and appropriate basis. When, in very rare cases among hundreds and hundreds of contractors in a fast-moving market, it may become clear that someone has in fact been hired under such a scheme, it takes immediate steps to end that relationship and then to follow up, of course, and to pursue as may be required under law. If he is concerned about the interests of taxpayers, may I remind him that many of the people who benefit from disguised remuneration have not been paying tax, from which our public services benefit, and it is those taxpayers whose interests we are also seeking to protect.

Oral Answers to Questions

Debate between Jesse Norman and Sammy Wilson

Tuesday 15th September 2020 Commons Chamber

[Jesse Norman]

I am very grateful for the suggestion. Now that the right hon. Gentleman has placed it on the public record, I will ask my officials to look more closely at it and to engage with him on it. He will know that we have already introduced, in a quite different context, a digital services tax. We are open to these potential ideas. We will be looking very carefully at this area. Intelligent and well thought through feedback is always of great interest to us.

[Sammy Wilson (East Antrim) (DUP)]

What discussions officials from (a) his Department and (b) HMRC have had with businesses in Northern Ireland on potential additional costs for exporting goods to Great Britain from Northern Ireland under the withdrawal agreement.

[The Financial Secretary to the Treasury (Jesse Norman)]

The Government have been actively engaging with businesses and fully committed to providing them with the information and support needed to prepare for the end of the transition period in Northern Ireland. As was set out in the Command Paper, the Government’s position is that there should be no additional process, paperwork or restrictions on Northern Ireland goods arriving in the rest of the UK.

[Sammy Wilson]

While I welcome the provisions of the United Kingdom Internal Market Bill debated yesterday, they do not cover the issue that the EU is demanding that goods coming into Northern Ireland have tariffs imposed on them until it is proven that they have not left Northern Ireland and gone into the EU. This is damaging to business, because it requires additional paperwork, will affect cash flow, and will put up costs. Given that the Government are committed to keeping Northern Ireland in the UK customs union, that the Act of Union says that there should be no tariffs on trade between countries within the United Kingdom, and that 75% of goods do not leave Northern Ireland once they enter anyhow, will the Minister give a commitment to ensuring in the Finance Bill that the EU demand for those tariffs to be collected will be removed so that Northern Ireland businesses are not disadvantaged?

[Jesse Norman]

As the right hon. Gentleman will know, these topics are currently very live matters of discussion between this country and the EU, and I am not going to comment on that. However, we are, as a Government, very engaged with this issue across a number of different Departments, and we will be looking to support the principles and positions set out in the protocol as we go forward.

Amendment of the Law

Debate between Jesse Norman and Sammy Wilson

Wednesday 21st March 2012 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

We all recognise that the Chancellor has been confronted with a difficult task in this Budget. He has had to walk a tightrope: if he goes too far one way, our financial credibility is immediately questioned so interest rates have to rise, yet if he goes too far in the other direction, we impair our ability to earn our way out of the recession.

My party does not have any political points to score against the Conservative party, as it is not represented in Northern Ireland, so we simply want the Chancellor and the Government to succeed. That is the basis on which I assess the Budget. Is this Budget likely to achieve the objectives we all want: restored growth and increasing employment?

Some of the Budget’s measures are very welcome. From a Northern Ireland perspective, we welcome the devolution of air passenger duty, which will be included in the Finance Bill. That will enable the Northern Ireland Executive to set its own rate for long-haul direct flights from Northern Ireland, which is essential to our investment strategy and to tourism. We also welcome the reduction in corporation tax as it brings our rate closer to the rate in the Irish Republic, which is our main competitor for foreign direct investment—although those rates are still far apart. We welcome, too, the film and high-end TV tax concessions. We have been seeking to promote that industry in Northern Ireland. The Executive have pushed for that. “Game of Thrones” is now filmed in Northern Ireland, and it has been a big revenue earner. We have also pushed for Belfast to be chosen as one of the broadband cities.

However, although there is clearly much to be welcomed, I am concerned about three aspects of the Budget. First, the Government could spend more money on infrastructure in the United Kingdom. That would enhance economic growth. Such pump-priming by the Government could enable us to draw upon some of the funds—£700 billion in cash—that private companies are currently hoarding.

After all, does the Chancellor believe his own rhetoric? He says that both the deficit and debt have fallen as a percentage of GDP, that the public sector net debt peak will not be as high as previously anticipated, and that we are on course for deficit reduction. He must therefore know that his credibility in the international money markets is sufficiently high for him to be able to invest in projects that offer a rate of return and that could help to promote economic growth, rather than merely pay unemployment benefits. Either he does not believe his own rhetoric, or else he is deliberately—perhaps for ideological reasons—holding back on what I believe could be an important means of investment.

Secondly, I am concerned about a choice that has been made. At a time when we are preaching austerity to people who are bleeding in that many of them cannot pay their heating bills or their rent or buy food, it is bizarre that the Government should choose to prioritise reducing the top rate of tax for the top 2% of earners in this country. That demonstrates a blatant disregard for the very difficult sacrifices that we are asking people to make.

Let us consider how the money could have been spent. There has been much argument today about whether or not the rich will pay more. The one thing we do know, however, is that it has been calculated that that reduction in the top rate of tax will immediately release £3,010 million to the top 2% of wage earners. The Government are relying on tax exiles flooding into the United Kingdom and beating on the door of Her Majesty’s Revenue and Customs to ask, “May I pay my tax in the United Kingdom now?” The Treasury hide behind the theory of “behavioural assumptions”, but we need only look at the literature to see that there are a lot of assumptions that may, or may not, be realised. The same situation applies for the money that could come from stamp duty and limits on the back claims.

The fact is that this money could have been used in a better way. For example, the Government could have used it to lower fuel duty, but despite the fact that fuel prices are going up, the Government are going to take £800 million more off motorists in the United Kingdom this year.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

I am thoroughly enjoying the hon. Gentleman’s speech and would not wish to interrupt it for a second, but may I ask him what money he is referring to when he talks about a better way of spending that money? What we know from the Treasury is that our top rate raised very little incremental cash and that reducing it is likely to raise more money from the same people. So what money is he talking about?

[Sammy Wilson]

According to the Treasury, the direct impact—the direct static cost—is going to be £3,010 million. That is the figure that the Treasury has put out. Some of that money will be offset by behavioural change, but that is based on assumptions about tax income elasticity and what happens to income. So real money will go back to people who currently are top rate taxpayers. My argument is this: if the Government were going to release that kind of fund, would it not be far better to release it either to bring more low-income families out of tax or to release the hard-pressed motorist from the fuel duty that is going to be imposed on them?