Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what action they will take to encourage mortgage lenders to reduce the proof of income burden on applicants who are self-employed.
Answered by Lord Agnew of Oulton
The proof of income information requirements from lenders for all mortgage applicants, including self-employed individuals, are commercial decisions and the Government does not seek to intervene.
However, the current FCA rules on how firms should assess the affordability of mortgages from applicants are deliberately framed to accommodate both salaried and self-employed borrowers.
New applicants will be asked to provide information on their income and expenditure, but FCA rules allow firms to decide for themselves how best they satisfy themselves regarding income information. FCA rules are not reliant on documents such as payslips, for example lenders could choose to use company accounts or projected business plans.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what progress they have made in developing a scheme to provide financial support to directors of small businesses who pay themselves through a dividend; and what steps they have taken since the Prime Minister committed to look into the options for that group of people on 27 May.
Answered by Lord Agnew of Oulton
Those who pay themselves a salary through their own company are eligible for the Coronavirus Job Retention Scheme (CJRS). The CJRS is available to employers, including owner-managers, and individuals paying themselves a salary through a PAYE scheme are eligible. Where furloughed directors, including companies with a sole director, need to carry out particular duties to fulfil their statutory obligations, they may do so provided it is no more than would reasonably be judged necessary for that purpose.
Dividends are not covered by the CJRS or the Self-Employment Income Support Scheme (SEISS). Income from dividends is a return on investment in the company, rather than wages. Under current reporting mechanisms it is not possible for HM Revenue and Customs (HMRC) to distinguish between dividends derived from an individual’s own company and dividends from other sources, and between dividends in lieu of employment income and as returns from other corporate activity.
The Government has worked with stakeholders and carefully considered the case for providing a new system for those who pay themselves through dividends. However, targeting additional support for those who pay their wages via dividends is much more complex than existing income support schemes. Unlike announced support schemes, which use information HMRC already hold, such a scheme would require owner-managers to make a claim and submit information that HMRC could not efficiently or consistently verify to ensure payments were made to eligible companies, for eligible activity.
The Government has heard the suggestion made that HMRC could adopt a ‘pay now, claw back later’ approach. However, such an approach would be highly resource-intensive to ensure appropriate compliance, and there is a high risk that incorrect or fraudulent payments could not be recovered, ultimately at the cost of UK taxpayers.
The Chancellor of the Exchequer has said there will be no further extension or changes to the SEISS or CJRS. However, other support is available. The CJRS and SEISS continue to be just two elements of a comprehensive package of support for individuals and businesses. This package includes Bounce Back loans, tax deferrals, rental support,?increased levels of Universal Credit, mortgage holidays, and other business support grants.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the proposals for a Furloughed Space Grant Scheme, put forward by the British Retail Consortium and the British Property Federation; and what plans they have, if any, to implement such a scheme.
Answered by Lord Agnew of Oulton
In this difficult period, the government is making sure that people and businesses have access to the support they need as quickly as possible. That is why the Government has announced unprecedented support to protect against the current economic emergency, including immediate steps to give businesses access to cash to pay its rent, salaries or suppliers. Alongside this, the Government has also taken temporary steps to protect commercial tenants from eviction as well as to safeguard UK high streets against aggressive debt recovery actions during the coronavirus pandemic.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many of the 750 Treasury roles due to be moved to a new ‘economic campus’ in the North of England will be recruited from the local labour market; how many of these roles will be (1) of Grade 7 or below, and (2) of Grade SCS1 and above; and when they expect these roles will be filled.
Answered by Lord Agnew of Oulton
As announced at the Budget on 11 March, the government will establish a significant new campus in the north of England focused on economic decision making. It will contain at least 750 roles, made up of teams from HMT, BEIS, DIT and MHCLG. We expect the implementation timetable to be set out at the forthcoming Spending Review, though we hope the new office will be fully operational by the end of this Parliament.
The exact grade mix and range of roles that the Treasury will provide has yet to be finalised, and is subject to internal consultation with the teams involved. However, we expect a full range of roles and grades, including SCS, to be represented. The Treasury roles will be filled with a mixture of local recruitment and staff who choose to relocate.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to ensure that (1) retail workers, and (2) the retail sector, are compensated for loss of earnings and revenue resulting from the COVID-19 outbreak.
Answered by Lord Agnew of Oulton
The government has unveiled a comprehensive and sizable package of direct fiscal support for business through tax relief and cash grants.
Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for 12 months, to support firms with costs and cashflow. This includes £25,000 for retail leisure and hospitality businesses up to £51,000 rateable value, and £10,000 for smaller retail, leisure and hospitality businesses, and several hundred thousand businesses eligible for small business or rural rate relief.
We will also support businesses by deferring Valued Added Tax (VAT) payments for 3 months, Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period. Retailers can also access other support mechanisms, including Coronavirus Business Interruption Loans.
Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying employees 80% of their wages, up to £2,500 per month, to safeguard workers from being made redundant.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether they intend to review the impact of business rates on the viability of the UK retail sector.
Answered by Earl of Courtown - Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)
The Government is committed to conducting a fundamental review of business rates and will announce details in due course. The Government will also increase the business rates retail discount from one-third to 50% in 2020/21 and extend eligibility to independent cinemas and grassroots music venues for the first time.
This is on top of repeated action taken by the Government to reduce the burden of rates by £13bn over the next five years. This includes doubling the threshold for Small Business Rate Relief, meaning 675,000 of the smallest businesses pay no business rates at all, and switching from RPI to the lower rate of CPI indexation which is worth over £6bn in savings to businesses.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of (1) the effectiveness, and (2) the fairness of the current system of business rates; and what plans they have to change the current system.
Answered by Earl of Courtown - Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)
Business rates currently raise £25 billion per year in England, and are an important source of funding for key local services such as adult social care and children’s services.
The Government concluded a fundamental review of business rates in 2016, and respondents agreed that property based taxes were easy to collect, difficult to avoid, relatively stable and clearly linked with local authority spending.
In line with stakeholder responses, the Government therefore decided to keep business rates as a property tax.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to reduce the 25 per cent contribution that the retail sector currently makes to business rates receipts.
Answered by Earl of Courtown - Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)
The Government has taken repeated action to reduce the burden of business rates for all ratepayers including retailers. The Government’s Plan for the High Street announced at Budget 2018 provides £1 billion of upfront support through a new retail discount, cutting retailers’ business rates bills by a third for two years from 1 April 2019 subject to eligibility.
Reforms and reliefs announced since Budget 2016 are reducing business rates by more than £13 billion over the next five years. This includes switching from RPI to CPI indexation, increasing the threshold for the standard multiplier to £51,000 and doubling the threshold for Small Business Rate Relief, meaning 675,000 of the smallest businesses pay no business rates at all.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the availability of credit insurance cover to assist small and medium-sized enterprises in the current trading climate.
Answered by Lord Young of Cookham
Government monitors the credit insurance landscape and credit insurers’ pricing practices, through liaison with providers, businesses, and industry bodies. We will continue to study the market and closely monitor trends.
Government has been made aware of restrictions in credit insurance cover some small and medium-sized product-based businesses are facing in the current trading climate. Difficult trading conditions, market trends, and uncertainty have led some credit insurance providers to reassess the level of cover they are willing to offer in certain sectors. This varies by industry and firm, and is a commercial decision for insurers.
Other financial services products are also available to support businesses in lieu of credit insurance, for example from banks.
Asked by: Lord Allen of Kensington (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to conduct a market study on credit insurance cover and pricing practices.
Answered by Lord Young of Cookham
Government monitors the credit insurance landscape and credit insurers’ pricing practices, through liaison with providers, businesses, and industry bodies. We will continue to study the market and closely monitor trends.
Government has been made aware of restrictions in credit insurance cover some small and medium-sized product-based businesses are facing in the current trading climate. Difficult trading conditions, market trends, and uncertainty have led some credit insurance providers to reassess the level of cover they are willing to offer in certain sectors. This varies by industry and firm, and is a commercial decision for insurers.
Other financial services products are also available to support businesses in lieu of credit insurance, for example from banks.