Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of paying tax in advance via HMRC's system of payments on account on (a) small business owners, (b) freelancers and (c) other self-employed people.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
There has been no recent assessment of the impact of requiring payments on accounts (POAs) from self-employed workers.
POAs have been a feature of Self-Assessment since its introduction in 1996. They are legally due and, despite their name, are not payable before income has been earned. There are two equal payments on account six months apart. The first is payable on 31 January, ten months after the beginning of the tax year to which it relates. The second is payable on the following 31 July, four months after the tax year ends.
POAs create a flow of revenue to the Treasury to fund public services. They allow Self-Assessment taxpayers to spread the cost of their tax bill rather than paying in a single lump sum. They also limit any timing advantage gained by Self-Assessment taxpayers compared to other taxpayers, such as employees whose tax is deducted from their pay.
Self-Assessment taxpayers (including the self-employed) can make a claim to reduce or cancel their payments on account if they think they are excessive, or no longer due.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to undertake a review of HMRC's payments on account system.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
At present the Government has no plans to undertake a review of HMRC’s Payments on Account (POAs) system for Self-Assessment.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps are being taken to ensure the accurate calculation of pensions for eligible individuals in the context of the McCloud remedy.
Answered by Laura Trott - Chief Secretary to the Treasury
The Public Service Pensions and Judicial Offices Act 2022 (the Act) provides remedy for discrimination that arose when new public service pensions schemes were introduced between 2014 and 2016. The Act provides that members must be provided with a remediable service statement which provides detailed information about their pension benefits, including any corrections to lump sum benefits, pension benefits or contributions required by the Act. The Act and HM Treasury directions specify the information that must be provided in the remediable service statement. Scheme Managers are responsible for complying with the requirements of the Act and Treasury Directions, and providing accurate information.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to help support eligible individuals following the McCloud Remedy.
Answered by Laura Trott - Chief Secretary to the Treasury
The Public Service Pensions and Judicial Offices Act 2022 provides remedy for discrimination that arose when new public service pensions schemes were introduced between 2014 and 2016. The remedy has two main elements: older “legacy” pension schemes were closed as of 1 April 2022 to equalise future accrual in newer “reformed” schemes; and, from 1 October 2023 all affected members are being given a choice at retirement (or within 18 months of 1 October 2023 for those who have already retired) as to whether to receive legacy or reformed scheme benefits for the remedy period.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has plans to review the High Income Child Benefit Charge threshold.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The Government is committed to managing the public finances in a disciplined and responsible way.
The High Income Child Benefit Charge (HICBC) targets Child Benefit expenditure so that the Government is supporting most families, whilst ensuring the fiscal position remains sustainable. The threshold affects taxpayers who are generally on comparatively higher incomes.
In 2020-21, (the latest year that data is available), 99.7% of those who declared a liability for HICBC paid income tax at the higher rate or above, and 88% of Child Benefit claimants were unaffected by the HICBC.
As with all elements of tax policy, the Government keeps the HICBC under review.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will review the threshold for the high income child benefit charge.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The Government is committed to managing the public finances in a disciplined and responsible way.
The High Income Child Benefit Charge (HICBC) targets Child Benefit expenditure so that the Government is supporting most families, whilst ensuring the fiscal position remains sustainable. The threshold affects taxpayers who are generally on comparatively higher incomes.
In 2020-21, (the latest year that data is available), 99.7% of those who declared a liability for HICBC paid income tax at the higher rate or above, and 88% of Child Benefit claimants were unaffected by the HICBC.
As with all elements of tax policy, the Government keeps the HICBC under review.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of people who will (a) experience financial detriment to their public sector pension and (b) delay retirement following the McCloud Remedy.
Answered by Laura Trott - Chief Secretary to the Treasury
The Public Service Pensions and Judicial Offices Act 2022 provides remedy for discrimination that arose when new public service pensions schemes were introduced between 2014 and 2016. No individual will experience detriment to their public service pension or need to delay their retirement. All eligible members will be able to choose to receive pension benefits in relation to pensionable service during the remedy period (from the new scheme or legacy scheme) of the greatest value to them.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of exempting air jackets for motorcyclists from VAT.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
Whilst there are currently no plans to remove VAT on motorcycle air jackets, the Government remains committed to ensuring the safety of motorcyclists. For example, motorcycle helmets, which satisfy the requirements of regulation 8(2) of the Personal Protective Equipment Regulations 2002, are zero-rated for VAT. Further information can be found here: Protective equipment (VAT Notice 701/23) - GOV.UK (www.gov.uk)
VAT has been designed as a broad-based tax on consumption, and the twenty per cent standard rate applies to the vast majority of goods and services, including motorcycle air jackets. While there are exceptions to the standard rate, these have always been strictly limited by both legal and fiscal considerations.
VAT is the UK’s third largest tax forecast to raise £173.3 billion in 2023/24, helping to fund key spending priorities such as important public services, including the NHS, education and defence.
The Government keeps all taxes under review and welcomes representations to help inform future decisions on tax policy, as part of the tax policy making cycle and Budget process.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of not applying IR35 rules for domestic contractors where a contract is forecast to end within a two week period.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The off-payroll working rules are designed to ensure that individuals working like employees but through their own company pay broadly the same income tax and National Insurance contributions (NICs) as those who are directly employed.
The government considered the suggestion of an exemption based on the length of a contract when consulting on the reforms to the off-payroll working rules, but concluded that it was not appropriate.
HMRC’s employment status manual (ESM0548) explains the role of the length of engagement in determining employment status.
Asked by: Patricia Gibson (Scottish National Party - North Ayrshire and Arran)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential impact of administrative changes to IR35 in 2021 on the extent to which domestic contractors are able to secure short-term contracts from UK clients.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The off-payroll working rules are designed to ensure that individuals working like employees but through their own company pay broadly the same income tax and National Insurance contributions (NICs) as those who are directly employed.
The government and HMRC remain committed to understanding the impacts of changes made to the rules in April 2021, and have published external research and HMRC’s own internal analysis on the short-term impacts of the reforms.