Asked by: Sarah Green (Liberal Democrat - Chesham and Amersham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of increasing the lifetime ISA property value limit.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Lifetime ISA (LISA) was set up to help people build up savings for buying their first home, or for their later life. LISA funds, including any Government bonus, can be withdrawn for the purchase of a first home under £450,000, in the case of terminal illness, or from the age of 60.
Any unauthorised withdrawals are subject to a 25% withdrawal charge. This recoups the Government bonus, any interest or growth arising from it, and a proportion of the individual’s initial savings. Reducing the withdrawal charge would encourage the use of LISAs in ways for which they were not intended.
The Lifetime ISA is set at an appropriate level to support most first-time buyers across the UK while targeting households that may find it most difficult to get onto the property ladder. Data from the latest UK House Price Index demonstrates that the average price paid by first-time buyers remains below the LISA property price cap in all regions of the UK.
The Government keeps all aspects of savings tax policy under review, and considers all representations made carefully, with any changes made as part of the Budget process.
Asked by: Sarah Green (Liberal Democrat - Chesham and Amersham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of reducing early access penalty for lifetime ISAs from 25% to 20%.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Lifetime ISA (LISA) was set up to help people build up savings for buying their first home, or for their later life. LISA funds, including any Government bonus, can be withdrawn for the purchase of a first home under £450,000, in the case of terminal illness, or from the age of 60.
Any unauthorised withdrawals are subject to a 25% withdrawal charge. This recoups the Government bonus, any interest or growth arising from it, and a proportion of the individual’s initial savings. Reducing the withdrawal charge would encourage the use of LISAs in ways for which they were not intended.
The Lifetime ISA is set at an appropriate level to support most first-time buyers across the UK while targeting households that may find it most difficult to get onto the property ladder. Data from the latest UK House Price Index demonstrates that the average price paid by first-time buyers remains below the LISA property price cap in all regions of the UK.
The Government keeps all aspects of savings tax policy under review, and considers all representations made carefully, with any changes made as part of the Budget process.
Asked by: Sarah Green (Liberal Democrat - Chesham and Amersham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential impact of removing the VAT exemption on independent school fees on (a) families within the armed forces community and (b) families in receipt of the Continuity of Education Allowance.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Government is committed to breaking down barriers to opportunity, ensuring every child has access to high-quality education, which is why we have made the tough decision to end tax breaks for private schools. This will raise revenue for essential public services, including investing in the education system.
The Government has set out the details of this policy in the technical note Applying VAT to private School Fees and Removing the Business Rates Charitable Rates Relief for Private Schools.
There are a small number of circumstances where the government contributes to the private school fees of children of UK military service personnel and UK diplomatic officials through the Continuity of Education Allowance (CEA).
The government will monitor closely the impact of these policy changes on affected military and diplomatic families, with the upcoming Spending Review being the right time to consider any changes to this scheme.
A technical consultation on the technical note and draft VAT legislation will be open until 15 September 2024.
Asked by: Sarah Green (Liberal Democrat - Chesham and Amersham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans she has for consultation of key stakeholders that may be affected by the introduction of VAT on private school fees.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Government is committed to breaking down barriers to opportunity, ensuring every child has access to high-quality education, which is why we have made the tough decision to end tax breaks for private schools. This will raise revenue for essential public services, including investing in the state education system.
The Prime Minister has been clear that if a child has an Education, Health and Care Plan that requires them to attend a private school because their needs cannot be met in the state sector, they will not feel an impact from VAT being charged on fees. The Chancellor has also been clear that changes will not come into force until 2025.
Further details on this policy will be set out in due course. The Government engages with a wide range of stakeholders with an interest in Government policy, including VAT, as part of the policy development and implementation process as a matter of course.
Asked by: Sarah Green (Liberal Democrat - Chesham and Amersham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she plans to take to ensure that the needs of children receiving specific provision for SEND within the private school system are taken into account as part of any consultation to introduce VAT on fees.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Government is committed to breaking down barriers to opportunity, ensuring every child has access to high-quality education, which is why we have made the tough decision to end tax breaks for private schools. This will raise revenue for essential public services, including investing in the state education system.
The Prime Minister has been clear that if a child has an Education, Health and Care Plan that requires them to attend a private school because their needs cannot be met in the state sector, they will not feel an impact from VAT being charged on fees. The Chancellor has also been clear that changes will not come into force until 2025.
Further details on this policy will be set out in due course. The Government engages with a wide range of stakeholders with an interest in Government policy, including VAT, as part of the policy development and implementation process as a matter of course.
Asked by: Sarah Green (Liberal Democrat - Chesham and Amersham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to ensure that the total £1.5 billion allocated for the Equitable Life Payments Scheme is paid out to affected Equitable Life policyholders.
Answered by Bim Afolami
The Government allocated £1.5 billion to the Equitable Life Payment Scheme. Before it ceased operations in 2016, the Scheme issued £1.12 billion in tax-free payments to nearly 933,000 policyholders. The remainder of the £1.5 billion has been set aside for future payments to the With-Profits Annuitants. Further information is available in the Final Report on the Scheme (https://www.gov.uk/government/publications/equitable-life-payment-scheme-final-report).
Asked by: Sarah Green (Liberal Democrat - Chesham and Amersham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what guidelines are followed by HMRC when making decisions on the allocation of discretionary financial awards.
Answered by Victoria Atkins - Shadow Secretary of State for Health and Social Care
The payment of rewards by HMRC is discretionary.
The reward application must evidence the quality of the information provided, the extent and value to which the information contributed to HMRC assigned matters, and the result.
Consideration must be given to any seizure details; revenue received/recovered; arrests; penalties; and the alleged value of a case being prosecuted by HMRC should be considered, where appropriate.
When processing a reward each case will be dealt with on its own merits.
Asked by: Sarah Green (Liberal Democrat - Chesham and Amersham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what was the total value of discretionary financial awards paid for by HMRC in each of the last six financial years.
Answered by Victoria Atkins - Shadow Secretary of State for Health and Social Care
Rewards figures paid by HMRC are published in the annual reports and accounts on the gov.uk website:
https://www.gov.uk/government/collections/hmrcs-annual-report-and-accounts
Asked by: Sarah Green (Liberal Democrat - Chesham and Amersham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to clarify IR35 guidance on whether (a) workers, (b) end clients or (c) umbrella companies are liable to pay Employer's National Insurance Contributions and the Employer's Training Levy.
Answered by Victoria Atkins - Shadow Secretary of State for Health and Social Care
Where a worker is engaged, via an intermediary, by a large- or medium-sized private or voluntary sector client or by a public body, and the off-payroll working rules apply to the engagement, it is the deemed employer who is responsible for deducting income tax and employee National Insurance contributions (NICs) from the payment to the worker’s intermediary. In this situation, the deemed employer is also responsible for paying employer NICs and Apprenticeship Levy, where applicable, on top of the payment to the worker’s intermediary. Guidance on this is available on GOV.UK.
Where a worker is employed by an umbrella company, the off-payroll working rules do not apply and the umbrella company is responsible for paying any employer NICs and Apprenticeship Levy due. HMRC has published guidance to help workers engaged by umbrella companies to understand how these arrangements work, how they can expect to be paid and how to challenge if unauthorised deductions are made.
Asked by: Sarah Green (Liberal Democrat - Chesham and Amersham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions he has had with representatives of the travel industry on the potential impact of removing VAT from the price of covid-19 PCR tests.
Answered by Lucy Frazer
VAT is a broad-based tax on consumption. The standard rate of 20 per cent applies to most goods and services, including PCR tests. Medical testing, where it is administered by a registered health professional or where it is supervised by a relevant health professional and supplied as part of a single testing service, is exempt from VAT. The Government also continues to offer free Covid-19 testing for those with Covid-19 symptoms.
The Government recognises that the cost of PCR tests can be high, which is why we are working with the travel industry and private testing providers to see how we can further reduce the costs for the British public, whilst ensuring that travel remains as safe as possible. From 7 January 2022, eligible fully vaccinated passengers will no longer need to take a pre-departure test or self-isolate on arrival in England.