Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what representations he has received on requiring companies using continuous payment authorities to contact customers in advance of the automatic renewal date to provide the option to cancel.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Payment Services Regulations, which came into force in January 2018, regulate how Continuous Payment Authorities, or CPAs, are established, and the rights and obligations of payers, payees and payment service providers. In its published guidance on the regulations, the FCA states that consumers have the absolute right to cancel CPAs at any time before the end of the business day before a payment is due to be made, and to obtain an immediate refund from their payment service provider if any future payments are debited from their account after they have revoked their consent.
The Chancellor of the Exchequer has not received representations regarding companies using continuous payment authorities. In the Consumer Green Paper, ‘Modernising Consumer Markets’ published by the Department for Business, Energy and Industrial Strategy last year, the Government announced that it had asked the Consumer Protection Partnership to assess the issues with subscriptions and to recommend any further actions needed. The Government is considering the advice received and will publish a White Paper later this year.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the White Paper entitled The future relationship between the United Kingdom and the European Union, published in July 2018, how the facilitated customs arrangement set out in that White Paper will operate for UK exports which are sent via Rotterdam to non-EU destinations around the world.
Answered by Mel Stride - Secretary of State for Work and Pensions
The Facilitated Customs Arrangement (FCA) would remove the need for customs processes between the UK and the EU. The UK also proposes a range of unilateral and bilateral facilitations to reduce frictions for UK trade with the rest of the world. The details of the arrangement will be subject to negotiation with the EU.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the Government is seeking continued access for the UK to the VAT Information Exchange System after the UK leaves the EU.
Answered by Mel Stride - Secretary of State for Work and Pensions
The Government’s aim is to keep VAT processes as close as possible to what they are now. This will provide the best continuity and most certainty for businesses and individuals.
The Government supports administrative cooperation and exchange of information between countries, to help combat tax avoidance and evasion. The Government also supports the use of technology to underpin this and to simplify business burdens more generally.
The Taxation (Cross-border Trade) Act 2018 therefore provides the ability to enable continued access to, or to adapt, these procedures and IT systems.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to retain the principle in the VAT system that businesses do not need to pay VAT upfront on imports from EU Member States after the UK leaves the EU.
Answered by Mel Stride - Secretary of State for Work and Pensions
The Government’s aim is to keep VAT processes as close as possible to what they are now.
The Government recognises the importance of VAT accounting treatment to business, and is exploring options to mitigate any cash-flow impacts for business as a result of potential changes following EU exit.
The Government therefore confirmed in the VAT for business if there’s no Brexit deal technical notice that, if the UK leaves the EU without an agreement, the Government will introduce postponed accounting for import VAT on goods brought into the UK.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to paragraph 161 of the White Paper, The future relationship between the UK and the EU, Cm. 9593, published on 12 July 2018, what the evidential basis is for the statement that only 4 per cent of the UK goods trade would be likely to use the tariff repayment mechanism.
Answered by Mel Stride - Secretary of State for Work and Pensions
The government is seeking to maximise the number of traders who will not need to interact with a voluntary repayment mechanism. For businesses that would be eligible for a tariff repayment, the government assesses that this would lead to neither net costs nor job losses for these businesses. This is because businesses would only enter into the voluntary repayment mechanism if they stand to benefit overall from the UK’s independent trade policy. The Government assesses that the eligibility for a repayment is most likely relevant to imports of intermediate goods from non-EU countries for which a tariff differential could arise which is equivalent to around 4% of total UK trade in goods. Further detail is set out in section 1.2.1 of the publication.
The government estimates that approximately 4% of UK goods trade in 2017 was of imports of intermediate goods from non-EU countries for which tariff differentials with the EU could arise from the UK’s independent trade policy. This trade will be most likely to use the repayment mechanism, since intermediate goods typically have longer and more complex supply chains than finished goods and are less likely to know their final destination or use at the point of import.
The remaining 96% is either: (i) trade with the EU or exports to non-EU countries, for which the tariff differentials at the UK border are not relevant under the FCA; (ii) imports which are unlikely to see tariff differentials with the EU, since they imported under zero MFN tariffs, from existing EU FTA partners or from LDCs; or (iii) imports of finished goods, which we assume will be able to pay the correct tariff at the UK border.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to paragraph 161 of the White Paper, The future relationship between the UK and the EU, Cm. 9593, published on 12 July 2018, what the timetable is for setting up the systems needed to run the tariff repayment mechanism.
Answered by Mel Stride - Secretary of State for Work and Pensions
The precise details of the Facilitated Customs Arrangement – and therefore the delivery timescales - are subject to negotiations with the EU.
The Government is accelerating its preparations to ensure that our new customs arrangement can be in place as soon as possible. Current implementation timelines suggest there will need to be a phased approach to delivery of the FCA.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to paragraph 162 of the White Paper, The future relationship between the UK and the EU, Cm. 9593, published on 12 July 2018, what are the risk and intelligence-based checks.
Answered by Mel Stride - Secretary of State for Work and Pensions
Under the Facilitated Customs Arrangement, where there is a material risk of circumvention of higher UK tariffs, the UK would make it illegal to pay the wrong tariff. To check that the right tariffs are being paid, HMRC would carry out risk-based and targeted checks across the country, rather than at the border, according to intelligence and threat assessment that draw on a variety of information sources. This would protect against fraud, ensure that the UK has an effective trade remedies regime and strengthen the UK’s position in trade negotiations.
HMRC has a strong track record in tackling all kinds of avoidance, evasion and non-compliance and already has an established approach to customs compliance involving pre and post clearance activity away from the border, and would use this approach for the Facilitated Customs Arrangement.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to paragraph 161 of the White Paper, The future relationship between the UK and the EU, Cm. 9593, published on 12 July 2018, what the types of goods are which are likely to be included in the 4 per cent of the UK goods trade which will need to use the tariff repayment mechanism.
Answered by Mel Stride - Secretary of State for Work and Pensions
The government estimates that approximately 4% of UK goods trade in 2017 was of imports of intermediate goods from non-EU countries for which tariff differentials with the EU could arise from the UK’s independent trade policy. This trade will be most likely to use the repayment mechanism, since intermediate goods typically have longer and more complex supply chains than finished goods and are less likely to know their final destination or use at the point of import.
Examples of intermediate products that may use the repayment mechanism include car parts such as car batteries, machinery parts and industrial chemicals.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, if he will respond to Early Day Motion 1239, on the 2019 Loan Charge.
Answered by Mel Stride - Secretary of State for Work and Pensions
The 2019 loan charge is targeted at artificial tax avoidance schemes where earnings were paid via a third party in the form of ‘loans’ which in reality were never repaid – ‘disguised remuneration’ (DR) schemes.
The Government has taken this action to ensure that everybody pays the taxes they owe and contribute towards the public-funded services from which they benefit.
Early Day Motion (EDM) 1239 calls for the loan charge to apply only to DR loans entered into after Finance Act 2017 received Royal Assent. Restricting the loan charge in this way would not be fair to ordinary taxpayers, who have always paid the right amount of tax and have not engaged in tax avoidance schemes.
The Government recognises that the loan charge will have a significant impact on some people who have used DR schemes. HMRC is encouraging scheme users to come forward and settle their tax affairs ahead of the loan charge arising. HMRC has a strong track record in helping those who are in genuine financial difficulty. HMRC is able to agree bespoke payment arrangements, allowing individuals to pay their tax bill over time.
HMRC pursues those who promote or enable tax avoidance schemes to ensure that nobody profits from selling avoidance. HMRC is able to charge tough penalties of up to £1m where promoters do not provide clear and accurate information to their clients, and penalties of 100% of the fees earned by anyone who designs, sells, or otherwise enables the use of tax avoidance arrangements.
HMRC is proactively reporting DR scheme promoters to the Advertising Standards Authority and professional bodies where they make misleading claims about their products and services or provide misleading advice.
HMRC will also consider criminal investigation where appropriate. Promoters of tax avoidance schemes have been prosecuted, leading to convictions and jail terms.
Asked by: Theresa Villiers (Conservative - Chipping Barnet)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps HMRC is taking to provide people affected by the 2019 Loan Charge provisions set out in the Finance Act 2017 with an extended time to pay their additional tax liabilities.
Answered by Mel Stride - Secretary of State for Work and Pensions
The 2019 loan charge is targeted at artificial tax avoidance schemes where earnings were paid via a third party in the form of ‘loans’ which in reality were never repaid – ‘disguised remuneration’ (DR) schemes.
The Government has taken this action to ensure that everybody pays the taxes they owe and contribute towards the public-funded services from which they benefit.
Early Day Motion (EDM) 1239 calls for the loan charge to apply only to DR loans entered into after Finance Act 2017 received Royal Assent. Restricting the loan charge in this way would not be fair to ordinary taxpayers, who have always paid the right amount of tax and have not engaged in tax avoidance schemes.
The Government recognises that the loan charge will have a significant impact on some people who have used DR schemes. HMRC is encouraging scheme users to come forward and settle their tax affairs ahead of the loan charge arising. HMRC has a strong track record in helping those who are in genuine financial difficulty. HMRC is able to agree bespoke payment arrangements, allowing individuals to pay their tax bill over time.
HMRC pursues those who promote or enable tax avoidance schemes to ensure that nobody profits from selling avoidance. HMRC is able to charge tough penalties of up to £1m where promoters do not provide clear and accurate information to their clients, and penalties of 100% of the fees earned by anyone who designs, sells, or otherwise enables the use of tax avoidance arrangements.
HMRC is proactively reporting DR scheme promoters to the Advertising Standards Authority and professional bodies where they make misleading claims about their products and services or provide misleading advice.
HMRC will also consider criminal investigation where appropriate. Promoters of tax avoidance schemes have been prosecuted, leading to convictions and jail terms.