Asked by: Martyn Day (Scottish National Party - Linlithgow and East Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential impact of increases in the number of adults using buy now pay later products on levels of unmanageable debt.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
HM Treasury regularly monitors the consumer credit market as part of its normal process of policy development.
The department draws on the research of various stakeholders, including consumer groups and the wider financial services industry, to inform policy development.
Asked by: Martyn Day (Scottish National Party - Linlithgow and East Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 16 November 2023 to Question 543 on High Income Child Benefit Tax Charge, how many families were impacted by the High Income Child Benefit Charge in (a) 2018-19, (b) 2019-20 and (c) 2020-21.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The High Income Child Benefit Charge is currently deemed to be the best mechanism to target Child Benefit expenditure. The present arrangements mean that the Government supports the majority of families, whilst helping to ensure the fiscal position remains sustainable.
The Adjusted Net Income (ANI) threshold for HICBC affects taxpayers who are generally on comparatively high incomes, and most families are unaffected. Raising the threshold would come at a significant cost to the Government at a time when support is needed for vital public services and to support the most vulnerable.
HMRC publishes statistics on the number of Child Benefit claimants, including the number impacted by HICBC. These can be accessed at the link here: https://www.gov.uk/government/statistics/child-benefit-statistics-annual-release-august-2022
Asked by: Martyn Day (Scottish National Party - Linlithgow and East Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of reviewing the income thresholds for payment of the High Income Child Benefit Charge.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The High Income Child Benefit Charge is currently deemed to be the best mechanism to target Child Benefit expenditure. The present arrangements mean that the Government supports the majority of families, whilst helping to ensure the fiscal position remains sustainable.
The Adjusted Net Income (ANI) threshold for HICBC affects taxpayers who are generally on comparatively high incomes, and most families are unaffected. Raising the threshold would come at a significant cost to the Government at a time when support is needed for vital public services and to support the most vulnerable.
HMRC publishes statistics on the number of Child Benefit claimants, including the number impacted by HICBC. These can be accessed at the link here: https://www.gov.uk/government/statistics/child-benefit-statistics-annual-release-august-2022
Asked by: Martyn Day (Scottish National Party - Linlithgow and East Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has plans to tackle third party websites which charge excessive fees for helping taxpayers reclaim tax rebates.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The government is committed to maintaining trust in the tax system and protecting customers. However, the government is aware that some taxpayers face issues and feel misled when using companies that specialise in claiming tax refunds from HMRC. This service is provided at a cost (often on a no-win, no fee commission basis) unlike claiming directly from HMRC which is free of charge.
HMRC consulted last year on measures to ensure individual taxpayers get the information they need to make informed decisions about whether to use a repayment agent - “Raising standards in tax advice: Protecting customers claiming tax repayments”.
The ‘Summary of Responses and Next Steps’ was published on 11 January 2023 which included actions to improve transparency requirements in the HMRC Standard for Agents and undertaking further work to strengthen the evidence that a claim has been made with a customer’s consent.
HMRC encourages customers to carefully read the repayment agent’s terms and conditions to understand what they are signing up to, the fees they will pay, and the legal agreement they are signing.
Asked by: Martyn Day (Scottish National Party - Linlithgow and East Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number and proportion of buy now pay later providers who voluntarily report their customers’ (a) borrowing and (b) repayment records to credit reference agencies.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
HM Treasury regularly monitors the consumer credit market as part of its normal process of policy development.
Buy-Now Pay-Later (BNPL) is an interest-free product which gives consumers a time-limited means of spreading payments for their purchases. When used responsibly and provided affordably it can be a helpful way for consumers to manage their finances and make purchases.
Many consumers are attracted to BNPL because of its interest-free nature, which the Government considers makes it inherently lower risk than most other types of credit. The FCA’s most recent Financial Lives survey found that 46% of people of who had used BNPL in the past 12 months chose it because it was interest-free. In addition, the survey found that 88% of users found it easy to keep track of their repayments.
As such, BNPL represents a popular alternative to traditional, interest-bearing forms of credit like credit cards and personal loans. For some financially vulnerable consumers it may also provide an alternative to high-cost and illegal lending. Further data from the FCA shows that around 14 million adults used BNPL in the six months to January 2023 and that the average outstanding BNPL balance is low at £236.
While the department does not hold precise information on the number and proportion of BNPL firms reporting borrowing and repayment records for their customers’ agreements to credit reference agencies, it understands that several of the UK’s major BNPL firms have reporting arrangements in place with at least one credit reference agency.
Asked by: Martyn Day (Scottish National Party - Linlithgow and East Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to introduce interim measures to protect buy now pay later borrowers.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
Buy-Now Pay-Later (BNPL) is an interest-free product which gives consumers a time-limited means of spreading payments for their purchases. When used responsibly and provided affordably it can be a helpful way for consumers to manage their finances and make purchases.
Many consumers are attracted to BNPL because of its interest-free nature, which the Government considers makes it inherently lower risk than most other types of credit. The FCA’s most recent Financial Lives survey found that 46% of people of who had used BNPL in the past 12 months chose it because it was interest-free. In addition, the survey found that 88% of users found it easy to keep track of their repayments.
As such, BNPL represents a popular alternative to traditional, interest-bearing forms of credit like credit cards and personal loans. For some financially vulnerable consumers it may also provide an alternative to high-cost and illegal lending. Further data from the FCA shows that around 14 million adults used BNPL in the six months to January 2023 and that the average outstanding BNPL balance is low at £236.
The Government’s consultation on proposed draft legislation to bring Buy-Now Pay-Later into regulation closed in April. Since then the Government has been carefully considering stakeholder feedback. The Government will publish a response to the consultation once it is finalised in due course.
In the meantime, BNPL users already benefit from broader consumer protection legislation, including on advertising and unfair contract terms. The FCA also has existing powers to take action against firms, which it used as recently as Tuesday 31 October to secure changes to firms' potentially unfair and unclear contract terms. Some BNPL firms have also introduced a credit ‘opt-out’ function for their customers.
Asked by: Martyn Day (Scottish National Party - Linlithgow and East Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the affordability of independent financial advice for members of pension schemes with safeguarded benefits who are required to take advice under section 48 of the Pension Schemes Act 2015.
Answered by Bim Afolami - Economic Secretary (HM Treasury)
The Pensions Schemes Act 2015 requires that members of pension schemes with safeguarded benefits take independent financial advice before accessing their pension pot flexibly, where the total value of the member’s benefits exceeds £30,000. These pensions offer a high level of security and guarantees that should not be relinquished without consumers being supported to make an informed choice about the risks.
In 2019, the Financial Conduct Authority (FCA) found that consumers who took advice from firms that charged on a non-contingent basis typically paid £2,500 - £3,500 for advice.
There are a variety of resources available to help consumers shop around for an advice firm that best meets their needs, including MoneyHelper’s Retirement Adviser Directory.
Asked by: Martyn Day (Scottish National Party - Linlithgow and East Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an estimate of the number of consumers that are using Buy Now Pay Later products to purchase essential items in the last 12 months.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
HM Treasury regularly monitors the consumer credit market as part of its normal process of policy development.
Buy-Now Pay-Later (BNPL) is an interest-free product which gives consumers a time-limited means of spreading payments for their purchases. When used responsibly and provided affordably it can be a helpful way for consumers to manage their finances and make purchases.
Many consumers are attracted to BNPL because of its interest-free nature, which the Government considers makes it inherently lower risk than most other types of credit. The FCA’s most recent Financial Lives survey found that 46% of people of who had used BNPL in the past 12 months used it because it was interest-free.
As such, BNPL represents a popular alternative to traditional, interest-bearing forms of credit like credit cards and personal loans. For some financially vulnerable consumers it may also provide an alternative to high-cost and illegal lending. According to the FCA’s most recent Financial Lives survey, nearly 9 million adults in the UK have used BNPL in the past 12 months, and the average user had £160 outstanding across their BNPL purchases.
HM Treasury does not hold precise information on the number of consumers using Buy-Now Pay-Later (BNPL) products to purchase essential items in the last 12 months. Instead, it draws on the research of various stakeholders, including consumer groups and the wider financial services industry, to inform policy development.
Asked by: Martyn Day (Scottish National Party - Linlithgow and East Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of introducing (a) tax incentives and (b) rebates to wholesale sector distributors to help increase (i) investment in renewable energy projects and (ii) recharging and refueling infrastructure.
Answered by Gareth Davies - Exchequer Secretary (HM Treasury)
A wholesale distributor incurring qualifying expenditure on plant or machinery could be eligible for full expensing, a 100% first-year allowance available for expenditure incurred before 1 April 2026. Investments in renewable energy projects and recharging and refuelling infrastructure could be eligible for full expensing, depending on the nature of the expenditure. There is a factsheet about full expensing available on gov.uk: https://www.gov.uk/government/publications/full-expensing/spring-budget-2023-full-expensing.
In addition, there are targeted 100% first-year allowances for qualifying expenditure on plant or machinery for electric vehicle charging points and gas refuelling stations, which could be claimed if full expensing was not available. These first-year allowances are available until April 2025.
More broadly, the UK has been a global front-runner in supporting provision of charging infrastructure along with private sector investment.
The Government have spent over £2 billion to support the transition to zero emission vehicles. This funding has focused on reducing barriers to the adoption of such vehicles, including accelerating the rollout of chargepoint infrastructure.
The UK is also a world leader in the decarbonisation of the electricity system, having reduced emissions by 70% since 2010. The Government is supporting renewables deployment through a range of policy levers, including the Contracts for Difference (CfD) scheme. Since launching the scheme in 2014, contracts totalling over 30GW of new renewable capacity have been awarded, including around 20GW of offshore wind.
Asked by: Martyn Day (Scottish National Party - Linlithgow and East Falkirk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to bring forward legislative proposals to regulate Buy Now Pay Later providers.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Government’s consultation on proposed draft legislation to bring Buy-Now Pay-Later into regulation closed in April. Since then the Government has been carefully considering stakeholder feedback. The Government will publish a response to the consultation once it is finalised in due course.