Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of (a) providing a rebate to people who paid tax on grant funding from the Self-Employment Income Support Scheme for the 2020-21 tax return and (b) removing the requirement that people who have received grants via the SEISS pay tax on those grants for the 2021-22 tax year.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Government has supported UK households throughout the pandemic with nearly £400 billion of COVID support, including through the Self-Employment Income Support Scheme (SEISS). The SEISS has provided over £28 billion in grants to 2.9 million individuals.
The Government does not think it is right to allow SEISS recipients to alter the rate of tax paid on that income over time. The SEISS was designed to support those whose income had dropped temporarily due to COVID-19. Like self-employed income, SEISS grant payments are subject to Income Tax and self-employed National Insurance contributions at the recipient’s rate of Income Tax in the year it was received.
The Government has implemented an unprecedented package of support for taxpayers struggling with paying tax liabilities. HMRC has scaled up its longstanding Time to Pay policy, which allows any business or individual in temporary financial difficulty to schedule their tax debts into affordable, sustainable, and tailored instalment arrangements. Anyone experiencing difficulties paying their tax bill can discuss payment options with HMRC.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what data his Department holds on the number of penalties issued for non compliance with IR35 regulations.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
HMRC cannot provide data that might disclose details about identifiable taxpayers. Following the 2017 reform of the off-payroll working rules in the public sector and the extension of this reform to medium and large-sized businesses outside the public sector from April 2021, HMRC undertakes compliance checks to ensure compliance with the rules.
HMRC has committed to taking a light touch approach to penalties in the first year of the reform. This means that unless there is evidence of deliberate non-compliance organisations will not have to pay penalties for mistakes relating to the off-payroll working rules made during the first year, regardless of when mistakes are identified. However, organisations will need to pay any tax due as a result of any errors identified. Where HMRC does impose a penalty for ‘careless’ behaviour, they will always consider whether that penalty can be suspended.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans he has to equalise National Insurance contributions of agency employers and employees with PAYE employers and employees.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
It is already the case that most agency workers must be treated as employees for Income Tax and National Insurance contributions (NICs) purposes by the agencies which supply them to the recipients of the workers’ services.
Agencies are required to make deductions of Income Tax and employee NICs, where these are due, from the workers’ pay in the same way and at the same level as with direct employees. The agencies will also be liable to pay employer NICs, where these are due, in respect of payments to the workers.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the energy bill discount scheme prohibits consumers from switching suppliers.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
We are providing a £200 reduction in households’ energy bills from October which will benefit all domestic electricity customers in Great Britain to reduce pressure on energy bills this year when global gas prices are high. This reduction will be automatically recouped from people’s bills in equal instalments over the next five years, and we expect suppliers will reflect this as a standing charge on electricity bills, incorporated into their standard charging methodologies.
The repayment will not be unique to individual energy accounts. Customers will be able to switch energy providers in the usual way with no additional complications.
The Department for Business, Energy and Industrial Strategy (BEIS) will work closely with industry and consumer groups on how best to deliver this policy, including through a public consultation in the Spring.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of proposals to restrict the use of red diesel from April 2022 on the construction industry.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
At Budget 2020, the Chancellor announced that the Government will remove the entitlement to use red diesel from most sectors from April 2022. This will more fairly reflect the negative environmental impact of the emissions they produce and help to ensure that the tax system incentivises the development and adoption of greener alternative technologies.
The Government recognised that this would be a significant change for some businesses and ran a consultation to gather information from affected users on the expected impact of these tax changes and make sure it had not overlooked any exceptional reasons why affected sectors should be allowed to continue to use red diesel beyond April 2022. During the consultation period, the Government engaged directly with a wide variety of organisations, including representatives of the construction sector.
However, the Government did not believe that the case made by sectors that will not retain their red diesel entitlement, including the construction sector, outweighed the need to ensure fairness between the different users of diesel fuels and the Government’s environmental objectives.
To support the development of alternatives that affected businesses can switch to, the Government is at least doubling the funding provided for energy innovation through the £1 billion Net Zero Innovation Portfolio. From that portfolio, the Government announced the £40 million Red Diesel Replacement Competition, which will provide grant funding for projects that develop and demonstrate lower carbon, lower cost alternatives to red diesel for the construction, and mining and quarrying sectors.
As announced at Spring Budget 2021, from 1 April 2021 until 31 March 2023, companies can also claim 130% first-year capital allowances on qualifying plant and machinery investments.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has received representations from the Welsh Government on the impact of receipt of the NHS and social care financial recognition scheme by primary care workers in Wales on income tax liabilities and/or benefit payments.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
Frontline health and social care workers make a valuable contribution to our society and we are so grateful for their continued work.
Income Tax is a tax paid on income and is therefore applied to grants and support payments made because of Coronavirus, including the NHS and social care financial recognition scheme.
Receiving a bonus may reduce the amount of support a claimant receives through means-tested benefits such as Universal Credit. This is because if a claimants’ earnings increase, they therefore have more money available to support themselves. It is a long-standing principle of means-tested benefits that as a person’s earnings increase their Government support decreases.
HM Treasury officials regularly discuss these, and similar issues, with the Welsh Government and other devolved administrations.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of whether the Welsh Government’s comparability factor for the Department for Transport should be updated in light of the changes to HS2 outlined in the Integrated Rail Plan to recognise that (a) Northern Powerhouse Rail Core Network, (b) Transpennine Route Upgrade and (c) the smaller rail schemes in the North and Midlands are England-only projects.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The UK Government is responsible for much of the rail infrastructure in Wales and therefore spends money on this infrastructure rather than providing Barnett-based funding for the Welsh Government to do so. This is consistent with funding arrangements for all other reserved responsibilities in Wales. For example, the UK Government spends money on policing in Wales rather than providing the Welsh Government with Barnett-based funding in relation to spending on police forces in England.
In line with this responsibility, the UK Government is currently delivering an ambitious programme to upgrade Welsh railways, including through the electrification of the Severn Tunnel and building a new station at Bow Street.
The Welsh Government’s comparability factors will be revisited at the next Spending Review. However, they will not be significantly affected by changes in rail infrastructure spending across England and Wales given this is a reserved responsibility as set out above.
Full details of how comparability factors work are set out in the Statement of Funding Policy.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what Barnett consequential the Welsh Government will receive from the £5.4 billion allocated to the Transpennine Route Upgrade in the Integrated Rail Plan.
Answered by Simon Clarke
The UK Government is responsible for much of the rail infrastructure in Wales, and therefore spends money on this infrastructure rather than funding the Welsh Government to do so.
In line with this responsibility, the UK Government is currently delivering an ambitious programme to upgrade Welsh railways, including through the electrification of the Severn Tunnel and building a new station at Bow Street.
The Barnett formula is applied at fiscal events when departmental budgets are set rather than being applied when departments announce how they are spending their budgets. At the recent 2021 Spending Review the UK Government provided the Welsh Government with more than £18 billion on average each year over the spending review period. The Welsh Government will determine how to spend this on its devolved responsibilities.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what Barnett consequential the Welsh Government will receive from the £17.2 billion allocated to the Northern Powerhouse Rail Core Network in the Integrated Rail Plan.
Answered by Simon Clarke
The UK Government is responsible for much of the rail infrastructure in Wales, and therefore spends money on this infrastructure rather than funding the Welsh Government to do so.
In line with this responsibility, the UK Government is currently delivering an ambitious programme to upgrade Welsh railways, including through the electrification of the Severn Tunnel and building a new station at Bow Street.
The Barnett formula is applied at fiscal events when departmental budgets are set rather than being applied when departments announce how they are spending their budgets. At the recent 2021 Spending Review the UK Government provided the Welsh Government with more than £18 billion on average each year over the spending review period. The Welsh Government will determine how to spend this on its devolved responsibilities.
Asked by: Jonathan Edwards (Independent - Carmarthen East and Dinefwr)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what Barnett consequential will the Welsh Government receive from the £12.8bn allocated to the HS2 East Core Network in the Integrated Rail Plan.
Answered by Simon Clarke
The UK Government is responsible for much of the rail infrastructure in Wales, and therefore spends money on this infrastructure rather than funding the Welsh Government to do so.
In line with this responsibility, the UK Government is currently delivering an ambitious programme to upgrade Welsh railways, including through the electrification of the Severn Tunnel and building a new station at Bow Street.
The Barnett formula is applied at fiscal events when departmental budgets are set rather than being applied when departments announce how they are spending their budgets. At the recent 2021 Spending Review the UK Government provided the Welsh Government with more than £18 billion on average each year over the spending review period. The Welsh Government will determine how to spend this on its devolved responsibilities.