Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will set the timescale for the implementation of tariff reimbursement scheme in relation to movements covered by the Northern Ireland Protocol.
Answered by Richard Fuller - Shadow Chief Secretary to the Treasury
The Government remains committed to establishing a reimbursement scheme for goods which have attracted a tariff upon entering Northern Ireland that can subsequently be shown to have remained in Northern Ireland or the rest of the UK.
Traders can use the customs duty waiver scheme where they are eligible. Further guidance can be found at: https://www.gov.uk/guidance/claim-a-waiver-for-duty-on-goods-that-you-bring-to-northern-ireland-from-great-britain.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of using differential rates of Stamp Duty to incentivise the development or purchase of comparatively energy efficient housing.
Answered by Lucy Frazer
The Government does not have any plans to reform Stamp Duty Land Tax (SDLT).
SDLT is charged on the purchase of property or land in England and Northern Ireland where the value is over £125,000. First-time buyers do not pay any SDLT on purchases below £300,000. Introducing incentives based on energy consumption would add significant complexity to the current operation of the system.
The Government keeps all taxes under review.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans he has for the extension and future funding of the Trader Support Service.
Answered by Lucy Frazer
The Government is currently considering options for the future of the Trader Support Service and will ensure customers continue to receive support in meeting customs requirements under the Northern Ireland Protocol. Traders and businesses will receive further updates in due course.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reason HMRC has issued personal tax refunds to third party companies rather than the individuals owed; and whether HMRC is taking steps to resolve that matter.
Answered by Lucy Frazer
Individuals can claim tax repayments from HMRC and HMRC will refund them directly. However, HMRC will issue a tax repayment to a third party when a taxpayer has either nominated or assigned the repayment to them.
Companies which specialize in claiming tax refunds often use assignments as part of the sign-up process, which means the repayment then legally belongs to that agent. When a taxpayer signs an assignment, HMRC is obliged to make payment directly to the repayment agent. Individual taxpayers are entitled to withdraw a nomination unilaterally, but agreement is needed from both parties to revoke an assignment.
The Government is aware that some taxpayers are unaware that an assignment will be used, or may not understand what it means in practice. HMRC launched the “Raising standards in tax advice: protecting customers claiming tax repayments” consultation on 22 June 2022, which can be found here: https://www.gov.uk/government/consultations/raising-standards-in-tax-advice-protecting-customers-claiming-tax-repayments.
One proposed measure the consultation seeks views on is restricting the use of assignments for tax repayments.
The consultation is running for 12 weeks and will close on 14 September 2022. Any decision resulting from the consultation will be announced at a future fiscal event.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made a recent assessment of the potential merits of reducing the 20 per cent VAT rate for for the hospitality sector in the context of increased energy and food costs.
Answered by Lucy Frazer
The temporary reduced rate of VAT was introduced on 15 July 2020 to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs in the hospitality and tourism sectors. This relief ended on the 31 March 2022.
The Government has been clear that the reduced rate of VAT for hospitality and tourism was a temporary measure designed to support the sectors that have been severely affected by COVID-19. It was appropriate that, as restrictions were lifted, and demand for goods and services in these sectors increased, the temporary tax reliefs were first reduced, and then removed, in order to rebuild and strengthen the public finances. While we keep all taxes under review, there are no plans to reintroduce a reduced rate of VAT from tourism and hospitality.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Answer of 16 June 2022 to Question 15398 on Tax Allowances: Health Professions, what the Government's policy is on the validity of medics incurring tax charges albeit managed via scheme pays, for inadvertently exceeding annual allowances due to inflation.
Answered by John Glen
The Government is committed to ensuring that hard-working NHS staff do not find themselves reducing their work commitments due to the interaction between their pay, their pension, and the relevant tax regime.
The NHS pension scheme is one of the most generous schemes available, and protects pensions in payment by increasing them by CPI and revalues accrued CARE benefits by CPI+1.5% each year.
Pensions tax relief one of the most expensive reliefs in the personal tax system. In 2019/20 Income Tax relief on total contributions and National Insurance relief on employer contributions for pension savings cost the Exchequer £61 billion, with around 60 per cent of Income Tax relieved at the Higher and Additional rates. The annual allowance helps to ensure that the highest earning pension savers do not receive a disproportionate benefit.
99 per cent of pension savers make annual contributions below £40,000, the level of standard annual allowance which has applied from 2014/15. Individuals who breach the annual allowance on tax-relieved pension savings can also use an option called ‘scheme pays’, under which they can require their pension scheme to pay their annual allowance tax charge now (in return for an actuarially fair reduction in their pension), provided that the annual allowance charge is at least £2,000 and they have exceeded the annual allowance of £40,000. In England and Wales, the NHS Pension Scheme goes further, allowing Scheme Pays to be used on any annual allowance charges relating to accrual in that scheme.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Answer of 31 May 2022 to Question 8221 on Tax Allowances: Health Professions, what assessment he has made of the potential for inflationary pressures to (a) drive pension growth and (b) cause medics to inadvertently exceed annual allowances and incur associated tax bills.
Answered by John Glen
The Government is committed to ensuring that hard-working NHS staff do not find themselves reducing their work commitments due to the interaction between their pay, their pension, and the relevant tax regime.
The NHS pension scheme protects pensions in payment by increasing them by CPI and revalues accrued CARE benefits by CPI+1.5% each year.
99 per cent of pension savers make annual contributions below £40,000, the level of standard annual allowance which has applied from 2014/15. Individuals who breach the annual allowance on tax-relieved pension savings can also use an option called ‘scheme pays’, under which they can require their pension scheme to pay their annual allowance tax charge now (in return for an actuarially fair reduction in their pension), provided that the annual allowance charge is at least £2,000 and they have exceeded the annual allowance of £40,000. In England and Wales, the NHS Pension Scheme goes further, allowing Scheme Pays to be used on any annual allowance charges relating to accrual in that scheme.
Asked by: Stephen Farry (Alliance - North Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the impact of inflation on the (a) tapered annual allowance for medical pensions and (b) incentives for medical professionals to work additional hours.
Answered by John Glen
The Government is committed to ensuring that hard-working NHS staff do not find themselves reducing their work commitments due to the interaction between their pay, their pension, and the relevant tax regime.
The NHS pension scheme protects pensions in payment by increasing them by CPI and revalues accrued CARE benefits by CPI+1.5% each year.
In April 2020, the Government raised the thresholds above which the tapered annual allowance applies by £90,000. As a result, no one with a net income before tax below £200,000 is now affected by the tapered annual allowance. In addition, the annual allowance only begins to taper down for individuals who also have total income (including pension accrual) above £240,000. It was estimated at Budget 2020 that these changes have taken up to 96% of GPs and up to 98% of NHS consultants outside the scope of the tapered annual allowance.
These changes allow pension savers to build significant retirement savings tax free, while also ensuring that the highest earning pension savers do not receive a disproportionate benefit from pension tax relief.