Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will include in the Coronavirus Job Retention Scheme employees who are paid annually via PAYE at the end of the financial year.
Answered by Jesse Norman
For an employee to be eligible for the CJRS they must have been notified to HMRC on a real-time information (RTI) submission on or before 19 March. Those paid annually are eligible to claim, as long as they meet the relevant conditions including being notified to HMRC on an RTI submission on or before 19 March 2020, which relates to a payment of earnings in the 2019/2020 tax year. Anyone paid annually and notified on an RTI submission after that date will not be eligible for the scheme, which puts them in the same position as those who are paid more frequently and were not notified to HMRC on or before 19 March. The 19 March date allows as many people as possible to be included by going right up to the day before the announcement and mitigates the risk of fraud that existed as soon as the scheme became public.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to paragraph 29 of The UK's Approach to the Northern Ireland Protocol, published May 2020, what steps his Department is taking to encourage businesses to sign up to trusted trader schemes to help facilitate the movement of goods from Great Britain to Northern Ireland.
Answered by Jesse Norman
The Northern Ireland Protocol is clear that Northern Ireland is, and will remain, part of the UK’s customs territory and that there should be no tariffs on internal UK trade. The Government has also set out that although there will be some limited additional process on goods arriving in Northern Ireland, there will be no new physical customs infrastructure.
In due course, the Government will also set out more detailed plans for extensive HMRC support for businesses engaged in the limited additional processes, including providing access to existing facilitations to support the movement of goods.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reason the Self-Employment Income Support Scheme has a maximum income cut-off of £50,000 while the Coronavirus Job Retention Scheme does not.
Answered by Jesse Norman
The different designs of the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) reflect their different objectives. The CJRS is designed to prevent employers making staff redundant, whereas the SEISS is designed to support the incomes of those self-employed individuals whose businesses are adversely affected by COVID-19.
Individuals can at present claim a taxable grant under the SEISS worth 80 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total.
The extension of the SEISS announced by the Chancellor of the Exchequer on 29 May 2020 means that eligible individuals whose businesses are adversely affected by COVID-19 will be able to claim a second and final grant when the scheme reopens for applications in August. This will be a taxable grant worth 70 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.
The SEISS, including the £50,000 threshold for average trading profits, is targeted at those who most need it, and who are most reliant on their self-employment income. The self-employed are very diverse and have a wide mix of turnover and profits, with monthly and annual variations even in normal times, and in some cases with substantial alternative forms of income too: for example, those who had more than £50,000 from trading profits in 2017-18 had an average total income of more than £200,000. Some 95 per cent of those with more than half their income from self-employment in 2018-19 could be eligible for this scheme.
Those with average trading profits above £50,000 may still be eligible for other elements of the unprecedented financial support package made available by the Government. These measures include Bounce Back loans, tax deferrals, rental support, increased levels of Universal Credit, mortgage holidays, and other business support grants.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will extend the duration of the Coronavirus Self-Employment Income Support Scheme for self-employed people who cannot go out to work because they have been advised by the NHS to shield and not to leave home for 12 weeks as a result of an underlying health condition.
Answered by Jesse Norman
The Chancellor of the Exchequer announced an extension to the Self-Employment Income Support Scheme on 29 May.
Eligible individuals whose business is adversely affected by COVID-19 will be able to claim a second and final grant when the scheme reopens for further applications in August. Individuals will be able to claim a taxable grant worth 70 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits and capped at £6,570 in total.
There will be no further changes and no further extensions to the scheme, which continues to be one of the most generous in the world.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the economic effect of the covid-19 lockdown on people that are deemed by HMRC to be employees under IR35 rules.
Answered by Jesse Norman
Under the off-payroll (IR35) rules, individuals working like an employee, but through a company, will pay similar levels of tax to other employees. In the public sector, it is the end client who determines an individual’s employment status for the purposes of the rules. Outside of the public sector, it is the individual’s Personal Service Company (PSC) that must determine their status.
The Government has announced a package of support for individuals to deal with lost income and the costs of absence due to COVID-19. For deemed employees working in the public sector, the Government expects many public sector organisations to continue to pay staff and not furlough them.
Owner-managers paying themselves a salary through PAYE can benefit from the Coronavirus Job Retention Scheme. Employers can use a portal to claim for 80% of the usual monthly wage costs of furloughed employees (employees on a leave of absence) up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions for that wage. The CJRS is open to all UK employers from 1 March 2020. For companies with a sole director, directors can continue to undertake their statutory duties while furloughed and still be eligible for the CJRS, as long as they do no work beyond these duties.
In addition, SMEs may also have access to support through the temporary Coronavirus Business Interruption Loan Scheme. This supports SMEs with loans, overdrafts, invoice finance and asset finance of up to £5 million, for up to six years. More information about the full range of business support measures is available at www.businesssupport.gov.uk/coronavirus-business-support/.
Individuals who are employed by a Personal Service Company (PSC) are entitled to statutory sick pay (SSP) on the same terms as any other employee. PSCs which are eligible and make payments under SSP as a result of COVID-19 will be entitled to a rebate where they meet the criteria of that scheme. Those not eligible for SSP (e.g. the self-employed and very low earners) will be able to receive support through the benefits system.
Individuals who have paid sufficient NICs, including through multiple jobs, will be entitled to new style Employment and Support Allowance. If they have not made sufficient contributions, they can apply for Universal Credit. These individuals will benefit from the Budget announcements to remove the seven day wait in new style Employment and Support Allowance and, if they are self-employed, the Minimum Income Floor in Universal Credit.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether self-employed workers deemed to fall within IR35 rules are eligible for any of the Government financial support schemes set up to assist people who have lost work and income as a result of the covid-19 outbreak.
Answered by Jesse Norman
The Government has announced a package of support for small and medium-sized businesses (SMEs) and individuals to deal with lost income and the costs of absence due to COVID-19.Individuals working through a Personal Service Company are not eligible for the Self-Employment Income Support Scheme. However, they may be eligible for the Coronavirus Job Retention Scheme if they pay themselves through a PAYE scheme. They may also have access to support through the temporary Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan Scheme.
Individuals who are employed by a Personal Service Company are also entitled to statutory sick on pay on the same terms as any other employee, and may be entitled to a rebate where they meet the criteria of that scheme. Those not eligible for Statutory Sick Pay will be able to receive support through the benefits system. Comprehensive information about the full range of business support measures is available at: www.businesssupport.gov.uk/coronavirus-business-support.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the economic value of work that (a) has already been and (b) is projected to be transferred overseas as a result of the extension of IR35 rules.
Answered by Jesse Norman
The off-payroll working rules are designed to ensure that someone working like an employee, but through a company, pays similar levels of tax to other employees. It is fair that individuals who work in a similar way should pay broadly the same amount of tax. The rules do not apply to the self-employed or stop anyone working through their own company.
The reform to the off-payroll working rules does not change the rules by which employment status is determined but moves the responsibility for making the determination from the individual to the end client.
At Budget 2018, the independent OBR did not judge the forthcoming reform to have any specific macroeconomic impacts. This was reiterated in the Tax Information and Impact Note (TIIN) published in July 2019, which sets out HMRC’s assessment that the reform to the off-payroll working rules is expected to affect 170,000 individuals. The TIIN can be found here: https://www.gov.uk/government/publications/rules-for-off-payroll-working-from-april-2020/rules-for-off-payroll-working-from-april-2020.
HMRC have not seen evidence of organisations changing their recruitment practices to hire contractors offshore. Organisations will continue to be free to decide how they engage their workers and it will be for those workers to decide whether they wish to accept the terms and conditions offered.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an estimate of the number of people deemed to be employees as a result of changes to the remit of IR35.
Answered by Jesse Norman
The off-payroll working rules are designed to ensure that someone working like an employee, but through a company, pays similar levels of tax to other employees. It is fair that individuals who work in a similar way should pay broadly the same amount of tax. The rules do not apply to the self-employed or stop anyone working through their own company.
The reform to the off-payroll working rules does not change the rules by which employment status is determined but moves the responsibility for making the determination from the individual to the end client.
At Budget 2018, the independent OBR did not judge the forthcoming reform to have any specific macroeconomic impacts. This was reiterated in the Tax Information and Impact Note (TIIN) published in July 2019, which sets out HMRC’s assessment that the reform to the off-payroll working rules is expected to affect 170,000 individuals. The TIIN can be found here: https://www.gov.uk/government/publications/rules-for-off-payroll-working-from-april-2020/rules-for-off-payroll-working-from-april-2020.
HMRC have not seen evidence of organisations changing their recruitment practices to hire contractors offshore. Organisations will continue to be free to decide how they engage their workers and it will be for those workers to decide whether they wish to accept the terms and conditions offered.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will amend the furlough scheme so that staff furloughed by charities are not prevented from performing voluntary work for them.
Answered by Jesse Norman
The purpose of the Coronavirus Job Retention Scheme is to support people who would otherwise have been made redundant. To prevent fraudulent claims, the Government made it clear that individuals cannot work or volunteer for their organisation.
This aims to protect individuals too; if workers were allowed to volunteer for their employer, the employer could ask them to effectively work full time while only paying them 80% of the wages. The Department for Culture, Media and Sport is working with other government departments and the voluntary, community and social enterprise sector to identify areas where volunteers can contribute to the COVID-19 response.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to tackle the use of aggressive artificial tax avoidance schemes by large international businesses.
Answered by Jesse Norman
Large businesses are subject to a significant level of scrutiny by HM Revenue and Customs (HMRC). Approximately half of the UK’s largest businesses are under HMRC investigation at any one time. In 2017-18 HMRC investigations into large businesses secured over £9bn in additional tax revenue. HMRC uses measures such as the Diverted Profit Tax, corporate interest restriction, and other rules to help promote tax compliance.
Tackling multinational tax avoidance is a global issue, which is why the UK continues to lead global efforts through the OECD and G20 to address gaps and mismatches in the international tax system. The UK has also been at the forefront of implementing actions arising as a result of this international effort. This includes introducing rules which prevent multinationals from exploiting differences in how countries tax financial instruments, entities and branches, and introducing rules which prevent multinationals claiming excessive tax deductions for interest expense.