Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will undertake a review of the tax exemption limit for cash redundancy payments; and if he will make a statement.
Answered by Jesse Norman
The Government confirmed in Finance (No. 2) Act 2017 that the first £30,000 of all termination payments remain exempt from income tax.
The UK has one of the most generous tax exemptions for termination payments in the OECD, and around 80% of the termination awards made each year will remain completely free from income tax. The £30,000 threshold also exceeds the maximum statutory redundancy payment of £15,750.
The Government has no plans to change the termination payments tax exempt threshold.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to issue a waiver for the tax due on redundancy payments to be received by Ford Bridgend workers.
Answered by Jesse Norman
The Government confirmed in Finance (No. 2) Act 2017 that the first £30,000 of all termination payments remain exempt from income tax. The UK has one of the most generous tax exemptions for termination payments in the OECD, and around 80% of the termination awards made each year will remain completely free from income tax.
HM Revenue and Customs does not have the data available to make an estimate on the cost of reducing tax from redundancy payments for Ford, Bridgend.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the value of reducing tax deductions from redundancy payments to workers at Ford Bridgend; and if he will make a statement.
Answered by Jesse Norman
The Government confirmed in Finance (No. 2) Act 2017 that the first £30,000 of all termination payments remain exempt from income tax. The UK has one of the most generous tax exemptions for termination payments in the OECD, and around 80% of the termination awards made each year will remain completely free from income tax.
HM Revenue and Customs does not have the data available to make an estimate on the cost of reducing tax from redundancy payments for Ford, Bridgend.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 10 April 2019 to Question 240486 on London Capital and Finance, when he plans to publish the terms of the investigation; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Further details of this investigation, including its terms, will be communicated in due course.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of establishing a compensation fund for investors who lost funds as a result of the collapse of London Capital and Finance; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The administrators for London Capital & Finance (LCF) are currently estimating recoveries for investors affected by LCF’s failure.
LCF’s investors are unlikely to have access to the Financial Services Compensation Scheme (FSCS). However, this would be for the FSCS to determine as an independent body from both HM Treasury and the Financial Conduct Authority.
The FSCS is working closely with the administrators to understand more about LCF’s activities. If there are circumstances that give rise to potentially valid claims, the FSCS will begin to accept claims against LCF and communicate this on their website.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when his Department plans to respond to the letter from the hon. Member for Bridgend of 13 November 2018, reference MM/JH/12/11/2018.
Answered by Mel Stride - Secretary of State for Work and Pensions
HM Revenue and Customs are currently investigating the issues raised in your original correspondence as they relate to operational tax matters. They aim to get back to you as soon as possible.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to ensure that the Financial Conduct Authority has the necessary resources to enforce its rules on pay day lenders carrying out affordability checks on potential customers.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government has fundamentally reformed regulation of the consumer credit market, transferring regulatory responsibility to the Financial Conduct Authority (FCA) on 1 April 2014.
The legislative framework provides for the FCA to be operationally independent from Government. The FCA is funded via a levy on financial services firms, which is set by the FCA to cover its funding requirement each year following consultation. As such, resourcing decisions are a matter for the FCA.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many prosecutions have been made against people promoting disguised remuneration schemes in each year since 1999.
Answered by Mel Stride - Secretary of State for Work and Pensions
This Government is committed to tackling avoidance in all its guises. A core part of our strategy has been to tackle the people behind these tax avoidance schemes. We have introduced legislation every year since 2014 providing HMRC with suite of powers to tackle promoters and enablers of tax avoidance schemes, designed to change behaviour and influence those involved to move out of promoting and enabling for good, with various sanctions and penalties for those who don’t.
HMRC are using these powers to challenge all major promoters of avoidance schemes, including disguised remuneration (DR) avoidance schemes. This has resulted in several major promoters stopping selling avoidance schemes and HMRC have also, through court action where needed, required around 30 other high-profile promoters to disclose details of previously undisclosed schemes, enabling HMRC to take counter-action on these schemes much earlier.
HMRC is considering whether some schemes involving attempts to avoid tax through the use DR may be fraudulent in nature.
HMRC will consider criminal investigation where appropriate, for example, where there is evidence of fraudulent behaviour. Promoters of tax avoidance schemes have been prosecuted, leading to convictions and jail terms for example:
In 2016 four men were found guilty of promoting and operating a fraudulent tax avoidance scheme, to defraud taxpayers out of £100 million.
In 2017 a chartered accountant was sentenced to eight years in prison for setting up and promoting a number of fraudulent schemes to wealthy professionals.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what the maximum amount of time is that HMRC provides to people who cannot afford to pay the 2019 loan charge.
Answered by Mel Stride - Secretary of State for Work and Pensions
HMRC has published a specific arrangement for disguised remuneration (DR) scheme users who currently earn less than £50,000, are no longer in tax avoidance, and settle before the loan charge arises. In these specific circumstances HMRC will agree an extended payment arrangement of up to five years without the need for detailed supporting information about their income and assets.
DR scheme users who earn £50,000 or more, or who require longer, may still be able to pay in instalments over periods in excess of 5 years if agreed with HMRC. There is no maximum amount of time that a person can have, to settle their avoidance scheme debt – any agreed payment plan should be affordable and specific to an individual’s personal circumstances. These payment arrangements will be tailored to an individual’s financial circumstances so HMRC will require more detailed supporting information.
Anybody who is worried about being able to pay what they owe should get in touch with HMRC.
Asked by: Madeleine Moon (Labour - Bridgend)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on revenue to the public purse of corporations hiring workers as self-employed to circumvent their employer’s national insurance contributions and workers’ rights liabilities as a result of changes to IR35 regulations.
Answered by Mel Stride - Secretary of State for Work and Pensions
The Government is committed to robustly tackling false self-employment. HM Revenue and Customs (HMRC) will investigate any evidence suggesting companies may have misclassified individuals for tax purposes. In these cases, HMRC will identify the facts and take steps to ensure the right tax and National Insurance contributions are paid.
Where the off-payroll working rules (IR35) apply, employer’s National Insurance contributions are payable. In April 2017, the Government introduced reform to IR35 for the public sector meaning responsibility shifted for determining whether the rules apply, from the individual’s own company to the public sector body engaging them. Early tax receipts are broadly in line with what was expected from the reform and the forecast of what the measure would raise.