Asked by: Kevin Hollinrake (Conservative - Thirsk and Malton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 20 January 2022 to Question 103605 on Financial Services Authority, on what specific information and reports the decision not take forward the legislation referred to in that Question was based.
Answered by John Glen - Shadow Paymaster General
The Government decided that it would not take forward legislation but would keep the position of contracts sold to unregulated firms under review and return to legislation if there was sufficient evidence of consumer detriment. This decision was reached based on careful consideration of the market conditions at the time, analysis of the available evidence of consumer harm and engagement with a range of stakeholders, including the Financial Services Authority (FSA) and Financial Ombudsman Service (FOS).
The Government continues to keep the position of mortgage contracts sold to unregulated firms under review. All mortgages, regardless of the regulatory status of the owner, must be administered by a regulated administrator.
It is worth reiterating that further regulation of this kind would not necessarily enable borrowers to switch to a cheaper mortgage deal or lower the interest rates they pay.
Asked by: Kevin Hollinrake (Conservative - Thirsk and Malton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the effect of the review of excise duties on wine and subsequent price impacts on small businesses and independent wine sellers of higher strength and higher value wines.
Answered by Helen Whately - Shadow Secretary of State for Transport
The Government believes the reforms announced at the Budget will produce an alcohol duty system that is overall simpler, fairer and healthier.
The reforms announced at Autumn Budget 2021 mean higher strength still wines will pay more duty, while lighter wines (below 11.5% alcohol by volume – ABV) will become cheaper.
The Government also announced that the 28% higher duty rate on sparkling wine will be abolished, so that sparkling wines will pay considerably less duty in future. From 2023 sparkling and still wines of the same strength will pay the same duty.
The Government is continuing to engage with industry – including small businesses – for further information about the effect of the changes on them. Industry members are encouraged to respond to the alcohol review consultation before the deadline of 30 January 2022.
Asked by: Kevin Hollinrake (Conservative - Thirsk and Malton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what (a) correspondence and (b) other information his Department holds on the basis on which the Economic Secretary to the Treasury decided not to take forward the Financial Services Authority regulation of administering a regulated contract on 2 January 2013.
Answered by John Glen - Shadow Paymaster General
In January 2011, the Government announced its intention to introduce further regulation in relation to the sale of regulated mortgage contracts to unregulated firms. Following a review, the Government decided that it would not take forward legislation but would instead keep the position of contracts sold to unregulated firms under review and return to legislation if there was sufficient evidence of consumer detriment.
The Government remains open to further regulation but is yet to see evidence that any consumer harm has occurred under the current regulatory regime that would have been prevented by the proposed regulation. Under the current regulatory regime, firms administering regulated mortgages, including third-party administrators, must be regulated. This means that they are subject to relevant provisions of the Financial Conduct Authority’s Mortgage Conduct of Business requirements, including provisions regarding the fair treatment of customers in arrears. It is also worth noting that further regulation of this kind would not necessarily enable borrowers to switch to a cheaper mortgage deal or to materially lower the interest rates they pay.
Asked by: Kevin Hollinrake (Conservative - Thirsk and Malton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to his Answer of 2 November 2021 to Question 64692, on Mortgages: Tax Allowances, for what reason his Department's estimate of the number of landlords affected by the decision to restrict tax relief on mortgage interest to the basic rate of income tax has changed from one in five to one in 10.
Answered by Lucy Frazer
The original estimate that 1 in 5 landlords would be affected by the decision to restrict finance cost relief to the basic rate of tax was a forecast based on limited information. The latest estimate of 1 in 10 is based upon received self-assessment tax returns for the tax year 2017-18, the first year after the restriction was brought into force. The statistic refers to individual UK landlords of residential property who completed the main self-assessment property return. It does not include corporate landlords, members of partnerships with property income, landlords of property abroad, landlords who completed the SA200 short self-assessment return, or owners of Furnished Holiday Lettings.
For tax year 2017-18, of all individuals that had declared property income via their self-assessment tax return, around 11 per cent, or approximately 1 in 10, paid more income tax as a result of the decision to restrict tax relief on mortgage interest to the basic rate of income tax.
Asked by: Kevin Hollinrake (Conservative - Thirsk and Malton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to his Answer of 2 November 2021 to Question 64692, on Mortgages: Tax Allowances, on what basis his Department has concluded that one in 10 landlords are affected by the decision to restrict tax relief on mortgage interest to the basic rate of income tax.
Answered by Lucy Frazer
The original estimate that 1 in 5 landlords would be affected by the decision to restrict finance cost relief to the basic rate of tax was a forecast based on limited information. The latest estimate of 1 in 10 is based upon received self-assessment tax returns for the tax year 2017-18, the first year after the restriction was brought into force. The statistic refers to individual UK landlords of residential property who completed the main self-assessment property return. It does not include corporate landlords, members of partnerships with property income, landlords of property abroad, landlords who completed the SA200 short self-assessment return, or owners of Furnished Holiday Lettings.
For tax year 2017-18, of all individuals that had declared property income via their self-assessment tax return, around 11 per cent, or approximately 1 in 10, paid more income tax as a result of the decision to restrict tax relief on mortgage interest to the basic rate of income tax.