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Written Question
Children: Day Care
Tuesday 30th April 2019

Asked by: Nigel Evans (Conservative - Ribble Valley)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what the Government's rationale was for the policy of introducing an income threshold on eligibility for tax-free childcare.

Answered by Elizabeth Truss

Tax-Free Childcare is limited to families where parents earn under £100,000 per year. The £100,000 per parent cap on Tax-Free Childcare ensures that support is targeted at the working families who require the most support in order to return to work or work more.

The £100,000 limit was announced at Autumn Statement 2015 and legislated for in 2016 because it is simple for parents to understand their eligibility, and because it aligns to an existing boundary in the tax system. The government published its final impact assessment of the introduction of Tax-Free Childcare, including the setting of an upper income limit at £100,000 per parent, in March 2017 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/652939/Tax-free_childcare_Impact_Assessment-March_2017.pdf).


Written Question
Children: Day Care
Tuesday 30th April 2019

Asked by: Nigel Evans (Conservative - Ribble Valley)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will publish his Department's analysis relating to the Government's decision to introduce an income cap on eligibility to tax-free childcare.

Answered by Elizabeth Truss

Tax-Free Childcare is limited to families where parents earn under £100,000 per year. The £100,000 per parent cap on Tax-Free Childcare ensures that support is targeted at the working families who require the most support in order to return to work or work more.

The £100,000 limit was announced at Autumn Statement 2015 and legislated for in 2016 because it is simple for parents to understand their eligibility, and because it aligns to an existing boundary in the tax system. The government published its final impact assessment of the introduction of Tax-Free Childcare, including the setting of an upper income limit at £100,000 per parent, in March 2017 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/652939/Tax-free_childcare_Impact_Assessment-March_2017.pdf).


Written Question
Children: Day Care
Tuesday 30th April 2019

Asked by: Nigel Evans (Conservative - Ribble Valley)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, for what reasons his Department set the cap at an earnings threshold of £100,000 for eligibility to tax-free childcare.

Answered by Elizabeth Truss

Tax-Free Childcare is limited to families where parents earn under £100,000 per year. The £100,000 per parent cap on Tax-Free Childcare ensures that support is targeted at the working families who require the most support in order to return to work or work more.

The £100,000 limit was announced at Autumn Statement 2015 and legislated for in 2016 because it is simple for parents to understand their eligibility, and because it aligns to an existing boundary in the tax system. The government published its final impact assessment of the introduction of Tax-Free Childcare, including the setting of an upper income limit at £100,000 per parent, in March 2017 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/652939/Tax-free_childcare_Impact_Assessment-March_2017.pdf).


Written Question
Children: Day Care
Tuesday 30th April 2019

Asked by: Nigel Evans (Conservative - Ribble Valley)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will undertake a review of the level at which the earnings threshold cap has been set for the eligibility for tax-free childcare.

Answered by Elizabeth Truss

Tax-Free Childcare is limited to families where parents earn under £100,000 per year. The £100,000 per parent cap on Tax-Free Childcare ensures that support is targeted at the working families who require the most support in order to return to work or work more.

The £100,000 limit was announced at Autumn Statement 2015 and legislated for in 2016 because it is simple for parents to understand their eligibility, and because it aligns to an existing boundary in the tax system. The government published its final impact assessment of the introduction of Tax-Free Childcare, including the setting of an upper income limit at £100,000 per parent, in March 2017 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/652939/Tax-free_childcare_Impact_Assessment-March_2017.pdf).


Written Question
Child Care Vouchers
Monday 29th April 2019

Asked by: Nigel Evans (Conservative - Ribble Valley)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what consultations were undertaken by his Department prior to the phasing out of the kiddicare voucher scheme.

Answered by Elizabeth Truss

The government announced at Budget 2013 that income tax and NICs reliefs on childcare vouchers would be phased out once a new, fairer and better-targeted scheme, Tax-Free Childcare, was introduced.

This was followed by consultations on the delivery of Tax-Free Childcare (www.gov.uk/government/consultations/tax-free-childcare).

The government published its initial impact assessment of the transition from Employer Supported Childcare to Tax-Free Childcare as part of the passage of the Childcare Payments Act 2014 on 20 November 2014, including an assessment on relevant equalities impacts covering families on low incomes, lone parents, carers and disabled people, older people, those taking parental leave and assisted digital access.

The original impact assessment is available here:

www.gov.uk/government/publications/tax-free-childcare-impact-assessment.

The impact assessment was updated on 20 April 2017, the update is available here: www.gov.uk/government/publications/tax-free-childcare-impact-assessment-march-2017.


Written Question
Child Care Vouchers
Monday 29th April 2019

Asked by: Nigel Evans (Conservative - Ribble Valley)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what the cost to the public purse was of providing the kiddicare voucher scheme in the most recent 12 months for which information is available.

Answered by Elizabeth Truss

HMRC’s publication ‘Estimated Costs of Principal Tax Reliefs’ includes the forecast cost of Employer Supported Childcare tax reliefs, of which Childcare Vouchers are the largest component, for the six years up to and including 2018/19. (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/782480/Jan19_Principal_Reliefs_Final.pdf)

HM Treasury does not hold information relating to the cost of individual childcare voucher schemes offered by specific providers.


Written Question
Children: Day Care
Monday 29th April 2019

Asked by: Nigel Evans (Conservative - Ribble Valley)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will undertake a trial of means-testing for eligibility to tax-free childcare.

Answered by Elizabeth Truss

Eligibility for Tax-Free Childcare is already conditional upon working parents and their partners each having an adjusted net income of less than £100,000 per year.


Written Question
Students: Finance
Tuesday 19th March 2019

Asked by: Nigel Evans (Conservative - Ribble Valley)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has plans to raise the national funding rate for 16 to 18 year old students (a) to £4,760 a year or (b) in line with inflation.

Answered by Elizabeth Truss

The government has made no decisions on Further Education spending beyond the current Spending Review period. Decisions on public spending, including on Further Education, will be taken at the Spending Review later this year.


Written Question
Company Cars: Taxation
Wednesday 6th March 2019

Asked by: Nigel Evans (Conservative - Ribble Valley)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he is taking to tackle the financial effect of the introduction of the Worldwide Harmonised Light Vehicle Test Procedure on company car drivers.

Answered by Robert Jenrick

As the Worldwide harmonised Light vehicles Test Procedure (WLTP) aims to replicate real-world driving conditions more closely, it is expected that reported CO2 values will increase.

Through the review of WLTP and vehicle taxes, the government has engaged with stakeholders to determine the impact on tax liabilities and the UK’s environmental objectives.

The review closed on 17 February and the responses are currently being analysed. The government has committed to publishing a response in the spring.


Written Question
Tax Avoidance
Thursday 14th February 2019

Asked by: Nigel Evans (Conservative - Ribble Valley)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, in relation to the Loan Charge 2019, whether Employment Benefit Trust schemes have always been considered defective by HMRC; and what the evidential basis is for the requirement to bring forward legislative proposals to enable HMRC to collect tax on loans issued since 1999.

Answered by Mel Stride - Secretary of State for Work and Pensions

Employment Benefit Trusts (EBTs) are often used as third parties in Disguised Remuneration (DR) schemes. DR schemes are contrived avoidance arrangements that pay loans in place of ordinary remuneration, with the sole purpose of avoiding income tax and National Insurance contributions.

It is the view of HMRC and the Courts that these types of arrangements have never been effective and tax was always due. HMRC has consistently challenged their use and publicised the risks of trying to avoid tax. They have opened and settled thousands of enquiries into the use of DR schemes, and successfully litigated a number of cases in the courts. The most well-known judgement was the unanimous Supreme Court decision in favour of HMRC against Rangers Football Club.

HMRC is working hard to help individuals get out of tax avoidance for good and is encouraging anyone who is concerned about their ability to pay what they owe, to contact them as soon as possible to discuss their position. In November 2017, HMRC set up a dedicated helpline for those wanting to settle their avoidance scheme use, and discuss payment options. HMRC will work with all individuals to reach a manageable and sustainable payment plan wherever possible.

Since the announcement of the 2019 loan charge at Budget 2016, HMRC has now agreed settlements on disguised remuneration schemes with employers and individuals totalling over £1 billion. Pay As You Earn (PAYE) liabilities fall on the employer in the first instance. The charge on DR loans does not change this principle and the employee will only be liable where the amount cannot reasonably be collected from the employer, such as where the employer is offshore or no longer exists. Around 85% of the settlement yield since 2016 is from employers, with less than 15% from individuals.

HMRC has also introduced a simplified process for those who choose to settle their use of DR avoidance schemes before the loan charge arises. DR scheme users who currently have an income of less than £50,000 and are no longer engaging in tax avoidance can automatically agree a payment plan of up to five years without the need to give HMRC any information about their income and assets. This arrangement has been extended to 7 years for scheme users who have an income of less than £30,000.