Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with HMRC on its reported engagement with contractors who used disguised remuneration schemes.
Answered by Jesse Norman
HM Revenue and Customs (HMRC) do not engage in, or enter into, disguised remuneration (DR) schemes. It is possible for a contractor providing services to HMRC to use a DR scheme without the department’s knowledge or participation. Where HMRC become aware of a contractor who is using a DR scheme, they take robust compliance action, including immediate action to terminate the engagement. These individuals are subject to the same tax compliance action in respect of their DR scheme use as any other scheme user.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the expected timeframe for EU imports arriving into the UK to be checked at customs.
Answered by Jesse Norman
The Government’s priority is to keep goods moving and avoid delays at the border. HMRC use a risk based, intelligence-led response to compliance issues working alongside Border Force.
The Government has put in place a number of measures to facilitate trade with the EU and to avoid disruption at ports, including publishing comprehensive guidance on the new arrangements for trade with the EU and operating a staged approach to customs controls in Great Britain. Until 31 December 2021 most traders importing non-controlled goods from the EU can make a simplified declaration in their own records and defer making a customs declaration to HMRC for 175 days. Further information can be found at https://www.gov.uk/guidance/delaying-declarations-for-eu-goods-brought-into-great-britain.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to support small businesses that have reported a loss of earnings as a result of supplies not being delivered on time due to a backlog at UK customs.
Answered by Jesse Norman
There is no backlog of goods awaiting clearance by UK customs. The Government has put in place a number of measures to facilitate trade with the EU and to avoid disruption at ports including publishing comprehensive guidance on the new arrangements for trade with the EU and operating a staged approach to customs controls. Until 31 December 2021 most traders importing non-controlled goods from the EU can make a simplified declaration in their own records and defer making a customs declaration to HMRC for 175 days. Further information can be found at https://www.gov.uk/guidance/delaying-declarations-for-eu-goods-brought-into-great-britain.
The Government has also provided a £20 million Brexit Support Fund to support small and medium sized businesses (SMEs) in adjusting to new customs, rules of origin, and VAT rules when trading with the EU.
In addition, businesses can choose to use customs facilitations to make trading across borders quicker, cheaper and easier. Further information can be found at https://www.gov.uk/guidance/check-if-you-can-delay-customs-duty-and-import-vat.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of exempting from VAT the fire safety works required for leaseholders under surveys deemed necessary to inspect cladding and other materials after the Grenfell tragedy.
Answered by Jesse Norman
The Government announced on 10 February 2021 that it would fully fund the cost of replacing unsafe cladding for all leaseholders in residential buildings 18 metres and over in England.
It was also announced that for low rise buildings between 11 metres and 18 metres, with a lower risk to safety, there will be new protection from the costs of cladding removal. This would be made through a long-term, low interest, Government-backed financing arrangement to pay for cladding removal, where it is needed.
In most cases, the standard rate of VAT will be applied to the removal and replacement of cladding. However, the cost of replacing cladding can be zero rated if it is tied to the initial construction of the building and the cladding is shown to be defective.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on businesses of reclaiming Coronavirus Bounce Back Loans from firms that are unable to open until permitted to do so under the easing of covid-19 restrictions.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government has already taken action to give businesses the flexibility and space they need to repay Bounce Back loans. No repayments are due from the borrower for the first 12 months of the loan, giving businesses the breathing space they need during this difficult time. In addition, the Government covers the first 12 months of interest payments charged to the business by the lender.
In order to give businesses further support in making their repayments, the Chancellor has announced “Pay as You Grow” (PAYG) options. PAYG will give businesses the option to repay their Bounce Back loan over ten years. This will reduce their average monthly repayments on the loan by almost half. Businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times). They can also pause their repayments entirely for up to six months – and given the continued challenges businesses are facing, HM Treasury has opted to enable borrowers to make use of this option from the first repayment, which means that businesses can choose to make no payments on their loans until 18 months after they originally took them out. If borrowers want to take advantage of this option, they should notify their lender when they are contacted about their repayments.
Together, the 12-month payment holiday and interest-free period for borrowers, along with the PAYG options, form a generous part of the Government’s unprecedented support package for businesses to protect jobs - including paying wages through the furlough schemes and self-employed support payments, generous grants, tax deferrals.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will work with banks to allow businesses to defer repayment of bounce back loans until they can reopen once covid-19 restrictions are eased.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Under the Bounce Back Loan scheme, no repayments are due from the borrower for the first 12 months of the loan, giving businesses the breathing space they need during this difficult time. In addition, the Government covers the first 12 months of interest payments charged to the business by the lender.
In order to give businesses further support and flexibility in making their repayments, the Chancellor has announced “Pay as You Grow” (PAYG) options. PAYG will give businesses the option to repay their Bounce Back loan over ten years. This will reduce their average monthly repayments on the loan by almost half. Businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months. Given the continued challenges businesses are facing, HM Treasury has opted to make the full repayment holiday available to borrowers from the first repayment, which means that businesses can choose to make no payments on their loans until 18 months after they originally took them out. If borrowers want to take advantage of this option, they should notify their lender when they are contacted about their repayments.
Together, the 12-month payment holiday and interest-free period for borrowers, along with the PAYG options, form a generous part of the Government’s unprecedented support package for businesses to protect jobs - including paying wages through the furlough schemes and self-employed support payments, generous grants, tax deferrals.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reason he has nominated the Chief Executive of HM Revenue and Customs as the expert adviser to the Independent Inquiry on the Loan Charge.
Answered by Jesse Norman
In September 2019, the Chancellor at the time commissioned Sir Amyas Morse to lead an independent review of the loan charge policy. Sir Amyas Morse had full control over the management of the review and maintained complete discretion over the advisers appointed and the stakeholders with whom he engaged. The Chief Executive of HM Revenue & Customs was not nominated or appointed as an adviser to the Review, in any capacity.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of extending the scope of Pool Re insurance to cover all major incidents and disasters in the UK.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
We are working closely with the insurers, the trade bodies and regulators to understand what more the industry can do to help individuals and businesses during the current crisis, and to learn lessons for future risks.
Whilst the scope of the current Government review of Pool Re is limited to its role as a reinsurer of terrorism risk, the conclusions from this work will also have important implications for how we manage systemic risks more broadly.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what responsibilities the most senior contractors who used the loan charge scheme had while they were engaged at Her Majesty's Revenue and Customs and Revenue and Customs Digital Technology Services.
Answered by Jesse Norman
HMRC’s legal duty to maintain taxpayer confidentiality means they are unable to disclose information relating to identifiable taxpayers. The information requested could potentially lead to the identification of individual taxpayers.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate his Department has made of how many clients of loan scheme promoters may become bankrupt.
Answered by Jesse Norman
HMRC cannot provide an estimate for the number of people who have used disguised remuneration (DR) loan schemes who have been declared or may become bankrupt. Individuals may be declared bankrupt for many reasons, not necessarily as a direct result of tax liabilities arising from DR scheme use. HMRC are not always the only creditor; some individuals may be declared bankrupt as a result of a non-HMRC debt and some individuals may choose to enter insolvency themselves, based on their overall financial position.
The Government is aware that some unscrupulous promoters continue to sell DR loan schemes. The Government and HMRC remain committed to tackling those who promote tax avoidance schemes. In March 2020, HMRC published their strategy for tackling promoters, which set out HMRC’s work to date and outlined how HMRC will continue to take robust action against promoters of tax avoidance.
HMRC only ever consider insolvency as a last resort and encourage taxpayers to get in contact to agree the best way to settle their tax debts. Anyone who is worried about being able to pay what they owe is encouraged to get in touch with HMRC as soon as possible.