Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the Ministry of Justice:
To ask His Majesty's Government what steps they are taking to ensure a fair and accessible system for resolving employment disputes which is not restricted by financial burdens.
Answered by Lord Bellamy - Parliamentary Under-Secretary (Ministry of Justice)
The Government is committed to ensuring an effective, efficient, and affordable justice system for all. We have taken various steps to increase capacity in the Employment Tribunals, such as the recruitment of an additional 19 salaried ET judges and 150 fee-paid ET judges in 2022/23. Additionally, the Judicial Review and Courts Act 2022 will transfer Employment Tribunal rule-making powers to the Tribunal Procedures Committee. This will allow the judiciary to manage their workloads more flexibly, maximising the capacity of the Employment Tribunal.
The Government is also investing in the development of new digital processes. The Employment Tribunal Reform project will provide a simple, fair and accessible service with simplified channels for engaging with the service, a focus on early resolution of cases, transparency for all the parties as the case progresses, and a reduction in the time taken to resolve employment disputes.
In addition, the Government supports the resolution of employment disputes via early conciliation, where possible. The Advisory Conciliation and Arbitration Service (Acas) provides free and impartial advice to assist parties in resolving their employment disputes. Acas received £56m in 2022/23 from the Department of Business and Trade (DBT), with c.£24m directed towards individual dispute resolution activity.
The Government is currently consulting on introducing modest fees in the Employment Tribunal and the Employment Appeal Tribunal. The Ministry of Justice recognises that the ET fees established in 2013 and quashed in 2017 by the Supreme Court were too high, and has carefully considered the lessons of the Unison Supreme Court judgment when developing this proposal.
The proposal of introducing modest fees seeks to ensure user-contribution towards the tribunals, which are currently fully funded from direct taxation, while ensuring that the principles of affordability, proportionality and simplicity underpinning the proposed fees continue to preserve access to justice for all.
Those who cannot afford to pay the proposed fees will be supported by our fee remission scheme, Help with Fees (HwF). In 2022/23, the scheme provided £80m in financial support to those on low incomes and with little to no savings. The scheme was recently reformed in November 2023 to provide for a much more generous scheme. In exceptional circumstances, the Lord Chancellor can exercise his power to remit a fee, which further ensures that access to justice is protected.
Asked by: Crispin Blunt (Independent - Reigate)
Question to the Home Office:
To ask the Secretary of State for the Home Department, what assessment she made if the implications for her policies of the findings of the report by the APPG on CBD products entitled Plan for a Legal and Regulated UK Hemp and Cannabis Sector, published on 29 July 2022, on (a) the potential effect of reviewing CBD legislation on urban and rural job creation and tax income for the Government and (b) the potential effect on the CBD industry of the Advisory Council on the Misuse of Drugs proposals for the dosage threshold of 50 micrograms of controlled phytocannabinoids per unit of consumption, made to her Department by that body on 17 December 2021.
Answered by Chris Philp - Minister of State (Home Office)
No specific assessment has been made of the implications of the APPG CBD report on the potential effects on employment and taxation of a review of CBD legislation.
In January 2021, the Home Office wrote to the Advisory Council on the Misuse of Drugs (ACMD) seeking the Council’s advice on how we can strengthen the law on consumer CBD products.
This followed concerns that some CBD products being sold for human consumption may contain THC (tetrahydrocannabinol), a controlled drug compound found within the cannabis plant, making these products likely to be unlawful.
The ACMD published their report on 17 December 2021, recommending changes to the law. We are in the process of considering their findings and the Government will respond in due course.
Asked by: Sarah Olney (Liberal Democrat - Richmond Park)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential impact of moving staff from HMRC's Customer Compliance Group to Covid-19 schemes on the compliance yield for 2020-21 and 2021-22.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
At the Spring Budget 2021 the Government announced a £100m investment into a Taxpayer Protection Taskforce to significantly extend His Majesty’s Revenue and Customs’ work to address fraud and error in the HMRC administered COVID-19 support schemes (Self Employment Income Support Scheme, Coronavirus Job Retention Scheme and Eat Out to Help Out).
The TPT investment has enabled HMRC to recruit and train new people to backfill these tax compliance posts; and in future years these additional resources will mitigate the impact on taxation compliance yield over the 5-year scorecard period.
Asked by: Harriett Baldwin (Conservative - West Worcestershire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans he has to tax Ukrainian nationals on their Ukrainian-source income such as pension payments while they reside in the UK as refugees.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The UK and the Ukraine have been signatories to a comprehensive Double Taxation treaty since 1993, which is available on GOV.UK:
https://www.gov.uk/government/publications/ukraine-tax-treaties
This treaty specifies how the two countries should tax income paid between the two countries with a view to avoiding double taxation.
A key concept for interpreting the treaty is the residence of the person receiving the income. A Ukrainian national living in the UK may be resident in either the UK or Ukraine under each country’s domestic legislation, or they may be resident in both. If the recipient is resident in both countries, the treaty sets out several tests to establish one single ‘treaty residence’. These tests consider all the individual’s facts and circumstances.
For pension income sourced in Ukraine, this will only be taxed in the country where the recipient is resident under the treaty, which could either be the UK or Ukraine depending on the circumstances.
The treatment of other types of income will vary, as set out in the treaty. HMRC has provided bespoke guidance (translated into Ukrainian) for situations where Ukrainians maintain their employment in Ukraine while present in the UK. This is also available on Gov.uk:
https://www.gov.uk/guidance/paying-taxes-in-the-uk-if-you-work-for-an-employer-based-in-ukraine
Asked by: Justin Madders (Labour - Ellesmere Port and Neston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of introducing an alternative tax arrangement for payments made by employers to help support their employees with increases in the cost of living.
Answered by Richard Fuller
The Government understands that people across the UK are worried about the cost of living, and has taken decisive action to get households and businesses through this winter and the next.
Introducing a tax relief on bonuses or discretionary payments could risk tax avoidance in circumstances where individuals are able to set artificially low contracted hours in order to benefit from additional tax-free payments.
The Government remains committed to managing the public finances in a disciplined and responsible way by targeting support where it is most needed. Tax reliefs are difficult to target in this way; they are of greatest benefit to those paying higher rates of tax while low-earning individuals benefit less or not at all.
Asked by: Matthew Offord (Conservative - Hendon)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what progress his Department has made on implementing the recommendation of the Taylor Review on ensuring that the taxation of labour is consistent across all employment forms.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Government recognises that differences in tax treatment for individuals across employment forms can have a fiscal impact and affect how people and businesses choose to provide or take on labour.
Good progress has been made in ensuring different forms of labour are taxed more consistently by, for example, addressing non-compliance with the off-payroll working rules, also known as IR35, which are designed to ensure that individuals working like employees but through their own company, usually a personal service company, pay broadly the same Income Tax and National Insurance contributions as those who are directly employed.
The Government announced a 1.25 percentage point increase in all dividend tax rates alongside the Health and Social Care levy, to ensure that those with dividend income make a contribution on that income in line with the contribution made by employees and the self-employed on their earnings.
The Government continues to keep all aspect of the tax system under review and any decisions on future changes will be taken as part of future fiscal events and in the context of wider public finances.
Asked by: Drew Hendry (Scottish National Party - Inverness, Nairn, Badenoch and Strathspey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of a mechanism by which, under IR35 rules, the deemed payment figure declared to HMRC, as reported by the fee payer, can be altered to enable the gross employee wages to be changed for tax calculation purposes, in circumstances where the personal service company has not paid the whole fee to the employee as wages, in relation to (a) Employers National Insurance, (b) Employees National Insurance, (c) the Apprenticeship Levy and (d) Personal Income Tax.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
The Off-Payroll working rules, commonly known as IR35, have been in place for over twenty years and are designed to ensure that individuals working like employees but through their own company, usually a personal service company (PSC), pay broadly the same Income Tax and National Insurance contributions (NICs) as those who are directly employed.
If the rules are determined to apply to an engagement, the deemed employer will operate Pay As You Earn (PAYE) to deduct any Income Tax and National Insurance Contributions (NICs) due from the gross wage before paying this to the PSC. The deemed employer is also responsible for paying any employer NICs and the Apprenticeship Levy, if applicable.
As PAYE has already been operated on the payment, this income will not be subject to any further taxation. How the PSC decides to remunerate the worker out of this income will therefore have no bearing on the calculation of tax that is collected through PAYE by the deemed employer on the gross wage.
Were the measure of deemed employment income under the off-payroll rules to be limited to the wages paid by the PSC to the worker, as suggested, the worker would be able to decide how much tax they wished to pay, undermining the intention that those working like employees should pay tax like employees.
Asked by: Wendy Chamberlain (Liberal Democrat - North East Fife)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of (a) Scotch Whisky distilleries and (b) reforms to alcohol taxation that widens the differential between spirits and categories such as beer and cider on (i) employment opportunities and (ii) local economies.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Government has announced several changes to alcohol duty that will support the Scotch Whisky sector. At the Budget, spirits duty was frozen, making freezes continuous since 2017. As part of our alcohol duty review, the Government intends to move to a system where all products are taxed in reference to the litres of pure alcohol they contain, making the taxation of other products more consistent with Scotch. Above 8.5% ABV there is to be no differentiation between product categories, providing a more level playing field between spirits and other products. These changes will narrow the difference between Scotch, wines and high-strength ciders.
The Government is continuing to engage with interested stakeholders on these reforms. A consultation ran from 27 October 2021 to 30 January 2022, and the Government is now analysing the responses. A tax information and impact note will be published following the consultation when the policy is final, or near final, in the usual way.
Asked by: Navendu Mishra (Labour - Stockport)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of the introduction of duty-free arrival stores on (a) employment at Manchester Airport and other regional airports and (b) the economy local to those airports.
Answered by Kemi Badenoch - President of the Board of Trade
Following a consultation, the Government announced on 11 September 2020 that duty-free sales would be extended to EU-bound passengers for the first time in over 20 years from 1 January 2021.
This is a significant boost to all airports and international rail terminals in England, Scotland and Wales, including Manchester, and smaller regional airports and rail hubs, which have not been able to offer duty-free to the EU before.
Duty-free on arrival did not form part of the Government's consultation on the potential approach to duty- and tax-free goods arising from the UK’s new relationship with the EU, which took place in the Spring of 2020. The Government nonetheless acknowledged in the summary of responses to the consultation that some stakeholders had requested the introduction of duty-free on arrival. This also set out that duty-free on arrival was not a scheme that the Government previously offered and was therefore not considering implementing the scheme at that time.
Duty-free on arrival conflicts with international principles of taxation which suggest that goods should be taxed in the country where they are consumed. The introduction of such a scheme could also undermine the UK high street and public health objectives. As with all policy areas, the Government will keep its position under review.
Asked by: Vicky Foxcroft (Labour - Lewisham, Deptford)
Question to the Home Office:
To ask the Secretary of State for the Home Department, what plans he has to use data collected through the Windrush Compensation Scheme to make an assessment of the revenue lost from taxation as a result of prohibiting undocumented migrants from taking up employment.
Answered by Priti Patel
None. The data collected through the Windrush Compensation Scheme relate to people who have status in the UK with the right to work rather than undocumented migrants without status.