Asked by: Lord Clement-Jones (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether Equity members who are currently contracted in TV and theatre under a weekly payroll and have other characteristics of employees but have self-employed tax and National Insurance status because of their pattern of work are eligible under the COVID-19 Job Retention Scheme.
Answered by Lord Agnew of Oulton
The Coronavirus Job Retention Scheme (CJRS) is only open to individuals who were employed on 19 March 2020 and on their employer’s PAYE payroll on or before 19 March 2020. Individuals who are not eligible for the CJRS may be able to access the other support the Government is providing.
The new Self-Employment Income Support Scheme (SEISS) will allow eligible individuals to claim a grant worth 80% of their average monthly trading profits, paid in a single instalment covering 3 months, and capped at £7,500 altogether. Self-employed individuals, including members of partnerships, are eligible if they have submitted their Income Tax Self Assessment tax return for the tax year 2018-19, continued to trade and have been adversely affected by COVID-19. Full details can be found on GOV.UK.
Individuals who are not eligible for the CJRS or the SEISS may be able to access other support the Government is providing to support individuals through the outbreak, including an increase to the Universal Credit (UC) standard allowance and Working Tax Credit basic element, and a relaxation of the UC minimum income floor for all self-employed UC claimants affected by the economic impacts of COVID-19.
Asked by: Lord Clement-Jones (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to (1) remove the £50,000 earnings cap for those self-employed people who may claim a grant through the COVID-19 Self-employment Income Support Scheme, and (2) provide support for self-employed people who run as limited companies and pay themselves in dividends, not PAYE, during the COVID-19 pandemic.
Answered by Lord Agnew of Oulton
Some 95% of people who receive the majority of their income from self-employment could be eligible for the Self-Employment Income Support Scheme (SEISS), based on 2017-18 data. The scheme, including the £50,000 threshold, is designed to be targeted at those who need it the most, and who are most reliant on their self-employment income. The self-employed are a very diverse population. They have a wide mix of turnover and profits, with monthly and annual variations even in normal times. Some may see their profits unaffected by the current situation, while others have substantial alternative forms of income: for example, those who had more than £50,000 from self-employment profits in 2017-18 had an average total income of more than £200,000. The self-employed can also offset losses against profits in other years and other forms of income.
Income from dividends is a return on investment in the company, rather than wages, and is not eligible for support. Under current reporting mechanisms it is not possible for HM Revenue and Customs 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. Expanding the scope would require HMRC to collect and verify new information. This would take longer to deliver and put at risk the other schemes which the Government is committed to delivering as quickly as possible.
Individuals who are not eligible for the SEISS may be able to access other support Government is providing, including the Bounce Back Loans Scheme for small businesses, the Coronavirus Business Interruption Loan Scheme, and the deferral of tax payments. More information about the full range of business support measures is available on GOV.UK.
Asked by: Lord Clement-Jones (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the amount lost to the Exchequer due to VAT fraud perpetrated by online traders based outside the EU; and what estimate they have made of the proportion of that fraud originating in China.
Answered by Lord Young of Cookham
The information requested is not held. HM Revenue & Customs (HMRC) estimate the tax gap, which encompasses fraud for VAT, excise duties and customs duty. However, it is not possible to produce these estimates for online traders based outside the EU, and for fraud originating in China. Tax gaps for VAT, excise duties and other taxes overall are provided in HMRC’s publication ‘Measuring Tax Gaps’.
HMRC estimate that the tax loss from VAT fraud and error on online marketplaces was between £1 billion and £1.5 billion in 2016/17. The department estimates that overseas sellers contributed to approximately 60% of the VAT loss.
Asked by: Lord Clement-Jones (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what discussions they have had with the government of China in relation to addressing online VAT fraud; and what steps they are taking as a result.
Answered by Lord Young of Cookham
HM Revenue & Customs (HMRC) have increased their engagement with China Customs through the Fiscal Crime Liaison Officer in Beijing. The engagement is designed to tackle undervaluation fraud, including online VAT fraud, with the help of the Chinese authorities. This has included a memorandum of understanding, set up in 2018, leading to a joint working group and a series of commodity-focused exercises.
In addition, HMRC’s primary focus in tackling the VAT issue has been with the online marketplaces through which those sellers operate, as this has proven to be an effective way of improving their compliance. The Fulfilment House Due Diligence Scheme supports this compliance activity by regulating the sites where overseas sellers store imported goods prior to their sale.
Asked by: Lord Clement-Jones (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many penalties they have issued to online traders based outside the EU for VAT fraud; and what was the total value of such penalties.
Answered by Lord Young of Cookham
The information requested is not held. HM Revenue & Customs (HMRC) record the total number and amount of penalties issued to sellers based overseas who operate on online marketplaces, but do not hold separate figures for EU and non-EU sellers.
Up to 29 July 2019, HMRC have issued VAT penalties to a total of 1,059 overseas sellers; the total penalty amount is £34,056,356.39.
Asked by: Lord Clement-Jones (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what assessment they have made of the progress of current negotiations on the proposed 4th European Union Directive on money laundering as regards risk assessment and consequent enhanced due diligence for United Kingdom Politically Exposed Persons.
Answered by Lord Deighton
The Government has advocated a risk-based approach to “politically exposed persons” domestically, through negotiations on the Directive.
In the UK, this would require treating UK PEPs, such as UK Parliamentarians, on the basis of risk when undertaking customer due diligence. Enhanced due diligence would only apply if the business relationship is assessed as high risk.
Political agreement between the Presidency, the European Parliament and the Commission on the Directive was reached on 16 December. We expect the Italian Presidency to provide further details shortly.
Asked by: Lord Clement-Jones (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government, further to the Written Statement by Lord Deighton on 25 November 2013 (WS 76–8), whether they consider that the new draft regulations on registration and eligibility for community amateur sports clubs meet Lord Deighton's pledge to "keep the rules as simple as possible".
Answered by Lord Deighton
The Government has decided to proceed with a single set of rules to apply to all clubs following detailed consultation across the sector. A single set of rules setting out clear tests will make it simpler and easier for clubs to understand and comply with their responsibilities. The rules are as simple as possible, bearing in mind they apply to almost one hundred different sports, operating in often very different ways.
However, the Government does recognise that the existing administrative arrangements that apply when an existing CASC changes its status – such as when an unincorporated association changes into a company – can be burdensome. HMRC will therefore introduce a simpler, more streamlined process within the existing legislative framework.
Asked by: Lord Clement-Jones (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Written Answer by Lord Deighton on 17 June (WA 42), whether the current industry guidance, which has been approved by Treasury Ministers, has yet been issued; whether a risk-based approach under the Fourth Money Laundering Directive means that in the United Kingdom, United Kingdom parliamentarians will be treated as politically exposed persons; and, if so, whether the industry guidance will need to be revised.
Answered by Lord Deighton
A range of industry anti-money laundering guidance has been issued by bodies such as the Joint Money Laundering Steering Group (JMLSG). The last major revision of the JMLSG guidance was in 2011 although some detailed changes were made in 2013 and 2014. This material is published on the JMLSG website - http://www.jmlsg.org.uk/
Discussions of the proposed Fourth Money Laundering Directive are continuing. The expectation is that in accordance with the updated global standards adopted by the Financial Action Task Force, domestic Politically Exposed Persons, including UK Parliamentarians may, on a risk-based assessment, be subject to enhanced due diligence.
The Treasury expects that if the Directive is adopted and transposed into UK law, UK anti-money laundering guidance will need to be revised.
Asked by: Lord Clement-Jones (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether they have issued guidance as to whether members of either House of Parliament are, or should be, considered as Politically Exposed Persons for the purposes of United Kingdom financial regulation; and, if so, what guidance.
Answered by Lord Deighton
The UK's Money Laundering Regulations 2007 define Politically Exposed Persons [PEPs]. UK Members of Parliament are not currently considered PEPs for UK purposes. However, revised global standards require that they are treated as PEPs.
As similar definitions apply in other jurisdictions UK Parliamentarians are likely to be considered as PEPs in other jurisdictions. We are seeking a risk-based approach to the application of this requirement in negotiating the Fourth Money Laundering Directive.
Treasury Ministers have approved industry guidance which further confirms that UK Parliamentarians are not PEPs for UK purposes. Some UK banks may apply enhanced due diligence to UK Parliamentarians in accordance with their own risk appetite, and as part of global policies and procedures.