Finance (No. 2) Bill

Debate between Nigel Huddleston and Sammy Wilson

2nd reading
Wednesday 17th April 2024 Commons Chamber

[Nigel Huddleston]

I thank the hon. Gentleman for his positive welcome of today’s news about inflation. He is right that it is welcome but we always need to keep an eye on it. I join him in thanking our farmers, who have played a pivotal role in helping food prices to come down. The supermarkets have a role in that area as well. He raises some points that are slightly outside the remit of the Bill, but I assure him I will continue to have conversations with ministerial colleagues and others, and I am sure he will as well. We always listen to the important farming community in this country, who do so much to create employment and provide us with food.

The Bill covers 24 different measures. I will not go through every single one of them, but want to focus on a few key areas. First, I turn to how the Bill rewards work. We all recognise the simple truth that work should pay. We understand how hard many people up and down the country work. This Government want to ensure they are recognised for that because that approach not only benefits individuals and families, but overall growth and the economy. As I mentioned, that is why we have already taken two Bills to cut national insurance through Parliament, but this Bill goes further.

A key measure in the Bill is to increase the high-income child benefit charge threshold from £50,000 to £60,000. In addition, the rate of the charge will be halved, so that individuals continue to receive child benefit until one household member earns £80,000, taking 170,000 families out of paying this tax charge. These changes are a well-earned reward for working families up and down the country and put pounds back into parents’ pockets.

[Sammy Wilson (East Antrim) (DUP)]

While the changes in the child benefit allowances are important, especially helping parents who want to get into work and have their children looked after, does the Minister accept that one of the biggest impacts of the Budget on people who are working is the way in which they are being dragged into higher tax rates because thresholds have not been raised? That is having a huge disincentive effect on working families.

[Nigel Huddleston]

The right hon. Gentleman will be aware that, back in 2010, the tax-free allowance was, I think, £6,475. Actions taken by this Government since then have increased the tax-free allowance to more than £12,500, a significant real-terms increase, which means that take-home pay is higher than it otherwise would have been. When taken in combination with other measures, it is a really important move.

Furthermore, I am sure the right hon. Gentleman would not want to detract from the significant changes in national insurance, which have put money back into people’s pockets. We have eliminated by a third a whole category of taxation—national insurance—and that will help working people in this country as well.

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[Sammy Wilson]

The Minister is quite right to point out the dangers of Labour being in charge of finances and the impact that that is likely to have on tax, but does he have the humility to accept that tax is higher under this Government than it has been for decades?

[Nigel Huddleston]

I certainly have the humility to accept and recognise that. Taxes are higher out of the obvious and widely accepted necessity of paying for massive amounts of intervention because of the pandemic and in response to supporting families and businesses through the cost of living challenges. We make no apology for intervening to support lives and livelihoods to the extent that it was necessary. It was absolutely vital that we intervened because not doing so would have been a disaster for the UK economy. However, the general level of taxation, as the right hon. Gentleman is probably aware, is much lower in the UK than in many other countries that also had to significantly increase taxes and Government intervention out of necessity in response to the pandemic. We have much lower levels of taxation than Germany, France, Italy and many other countries. As I said, we had high levels of taxation out of necessity, but we are now in a position to start reducing those levels of taxation out of policy intent and choice, and that is exactly what we are doing.

To conclude, this Finance Bill absolutely rewards hard work, supports our vital industries, boosts the housing market and continues to create a fairer, simpler and more modern tax system. It delivers on the Government’s commitment to prioritise economic growth and will ensure a brighter future for our country. For those reasons, I commend it to the House.

HMRC Self-Assessment Helpline

Debate between Nigel Huddleston and Sammy Wilson

Wednesday 20th March 2024 Commons Chamber

[Nigel Huddleston]

As I mentioned a few moments ago, there has been a trial closure of telephone services. The recently reported results show that the trial worked quite well. As we heard overnight and are hearing again in the Chamber today, the important challenge is that the confidence behind that has not been effectively communicated. The reassurances that I personally received on what will happen to help those who are not able to access online services—including the disabled, those without digital access and those with particularly complex cases—were not communicated. That is important to making sure that, as HMRC moves forward and policy is developed, we move at a pace with which people are comfortable.

[Sammy Wilson (East Antrim) (DUP)]

I hope that HMRC’s screeching U-turn is a result of the Minister’s action. If it is, I congratulate him on stepping in so quickly. Does he agree that, at a time when more and more people are being dragged into complex tax returns because of fiscal drag, when 1 million people had their calls to HMRC unanswered in January and when a record number of people are putting in their tax returns late because they cannot get information, HMRC should not have adopted such a policy? Will the Minister give us an assurance that this is not temporary and that whatever help income tax payers require to pay their tax will be made available?

[Nigel Huddleston]

I give the right hon. Gentleman an assurance on the latter point. As I have outlined several times today, I think we can all recognise that the move to digital, where appropriate, will relieve the burden on the people answering telephone calls and on some other services, allowing them to deliver precisely the end goal that he describes. Simplifying the tax system is a goal of Government policy. I gave an example of people on high incomes with relatively simple tax affairs—those who pay through PAYE, for example—and we are trying to remove as many of those people as possible from self-assessment. I completely understand the right hon. Gentleman’s points.

Loan Charge

Debate between Nigel Huddleston and Sammy Wilson

Thursday 18th January 2024 Commons Chamber

[Nigel Huddleston]

That is another important point to which I will come in a moment. I will now make some progress before I take further interventions, because I fear that otherwise I may ruin my responses.

As I said, the way in which we recover tax owed is important, including the interactions that individuals have with key bodies such as HMRC. The Government recognise that there were areas where the impact of the original loan charge was disproportionate to its aims. We have listened to concerns raised by hon. Members in the years since the loan charge was announced, and I have had conversations with HMRC about how it has, for example, endeavoured to improve the tone of communication with impacted individuals.

Changes in approach were also made following Lord Morse’s review, about which I have heard many comments today. Many people may not be aware, but in September 2019, the Government asked the former Comptroller and Auditor General of the National Audit Office, Lord Morse, to lead an independent review of the loan charge policy and its implementation. Lord Morse had full discretion over how the review was run, who he consulted and the recommendations made. That consultation included the APPG and many of the people in the Chamber today.

Following the review, Lord Morse recommended notable changes to the policy, and the Government accepted 19 of his 20 recommendations. Those changes benefit about 30,000 people and meant that the loan charge would apply only to outstanding loans made on or after 9 December 2010, rather than April 1999. That was the date when the Government announced anti-avoidance legislation that put beyond all doubt that the schemes were taxable—a very important date. The loan charge would also not apply to outstanding loans made in any tax years before 6 April 2016 where a reasonable disclosure of the use of a tax avoidance scheme was made to HMRC, but HMRC did not take action—again, some have made that point today. Taxpayers were also given additional flexibility in the way they pay in line with their individual circumstances, but Lord Morse was clear that the loan charge was necessary and in the public interest, and should remain in force.

[Sammy Wilson]

Does the Minister accept that HMRC officials helped to service the Morse review, and restricted its grounds and parameters? The original of that review has not been disclosed, and we do not know how it was changed in the meantime. There are great doubts about whether or not the Morse review was ever an independent review, and ever came to conclusions that would have dealt with the issues and the unfairness we have been discussing today.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before the Minister replies, I do want to say that I have given him more time than would normally be allocated for a Backbench Business debate. Several colleagues have tried to intervene, but do be aware that we have another important debate to follow. I am sure the Minister will be cognisant of that fact.