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3 Jul 2003 : Column 376W—continued
Savings
Mr. Todd: To ask the Chancellor of the Exchequer what plans he has to alter the tax treatment of tax exempt saving products. [121575]
Dawn Primarolo: The Government keep the tax regime under constant review to ensure that it continues to deliver its key objectives. The Government have recently consulted on radical proposals to simplify the taxation of pension savings. We are now considering responses to the consultation from around 380 organisations and individuals. There are no other current plans to alter the tax treatment of tax exempt savings products.
Sixth VAT Directive
Mr. David: To ask the Chancellor of the Exchequer (1) if he will support a revision of the Sixth VAT Directive which will allow a lower flat rate of VAT for construction work; [122810]
- (2) what plans he has to put forward proposals for changes to the Sixth VAT Directive. [122811]
John Healey: The Government will carefully consider representations for a reduced rate on all building work in the context of the upcoming European Commission review of the reduced rates provisions. The Government intend to take a full and active part in this review as with all other discussions on changes to EC VAT Law.
Small Business (Tax Collection)
Mr. Norman: To ask the Chancellor of the Exchequer what plans he has to change the Inland Revenue policy on collection of receivables in arrears from small businesses upon implementation of the Enterprise Act 2002. [123343]
Dawn Primarolo: Inland Revenue policy will not change upon implementation of the Enterprise Act 2002. The Inland Revenue will continue to support viable businesses, which experience financial difficulties, with the aim of encouraging enterprise and promoting a 'rescue culture'.
For a small business that goes into administration the Inland Revenue must act in accordance with insolvency law and will seek to recover no more and no less than it is legally entitled to, just as it would with any business.
Stamp Duty
Mr. Prisk: To ask the Chancellor of the Exchequer what powers he has to alter the rate of stamp duty without parliamentary approval. [121443]
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Tax Codes
Mr. Webb: To ask the Chancellor of the Exchequer what action his Department takes to ensure that tax codes for those (a) 65 and over and (b) 75 and over are altered in the year in which taxpayers reach (i) 65 and (ii) 75 years; and if he will make a statement. [122695]
Dawn Primarolo: For taxpayers reaching pension age who do not complete a tax return, the Inland Revenue will either have their date of birth in their records or find out from the Department of Work and Pensions that they are about to become entitled to their state pension. In these cases, they send the new pensioner a short form to obtain details of their income so that they can give them the full range of allowances to which they are entitled.
Once the Revenue has received details of the person's date of birth, they will use this information to give the higher allowance once the person reaches 75.
If for any reason the individual does not get the allowances they are entitled to, they should get in contact with their Revenue office.
Tax Credits
Mr. Willetts: To ask the Chancellor of the Exchequer pursuant to his answer of 14 April 2003, Official Report, column 536W, on tax credits, how many tax credit claimants are being paid by girocheque. [114411]
Dawn Primarolo: Inland Revenue makes arrangements to pay tax credits via giro cheque when suitable banking facilities are not available. When such facilities become available, and if direct payments are still due to be made, the arrangements are changed to make the payments direct into the recipients' accounts. Such changes are being made continually, and it is not possible to establish for which recipients we are currently expecting to pay their next payment via girocheque, except at disproportionate cost.
Annabelle Ewing: To ask the Chancellor of the Exchequer what representations he has (a) received from and (b) made to the Scottish Executive concerning recent problems with tax credit payments, broken down by (i) subject, (ii) date and (iii) responsible Scottish minister. [122511]
Mr. Boateng: None. Payments by the Scottish Executive are a devolved responsibility of the Executive.
Mr. Peter Duncan: To ask the Chancellor of the Exchequer how many individual appeals against working tax credit assessments are outstanding. [115805]
Dawn Primarolo: Award notices cover child tax credit and working tax credit together, if appropriate. At the end of May 2003, when about 3.7 million claims were already in payment, about 4,600 written appeals against tax credit decisions had been received but not yet settled. These cover disagreements about award notices that have been reported in writing, but exclude those that are effectively reporting changes in circumstances. They include both specific disagreements about elements of the award and more general observations on the level of award or the calculation method.
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Mr. Steinberg: To ask the Chancellor of the Exchequer if he will estimate the number of people who will (a) gain and (b) lose financially on the basis of their total income in the 2003–04 financial year as a result of the introduction of child tax credit. [119037]
Dawn Primarolo: I refer my hon. Friend to Chart 5.1 in the Economic and Fiscal Strategy Report (Budget 2003). It illustrates that a small number of families with children in the top 10 per cent. of the income scale will receive a smaller award of child tax credit than of the tax credits it has replaced. However, it also shows that even these families are on average around £5 a week better off due to the extra support this Government have given to families with children since 1997.
Mr. Willetts: To ask the Chancellor of the Exchequer pursuant to his answer of 14 April 2003, Official Report, column 542W, on tax credits, how many (a) tax credit application forms have been sent out and (b) completed application forms have been received, in each month since February. [121276]
Dawn Primarolo [holding answer 23 June 2003]:The cumulative monthly figures to the end of May 2003 are as follows.
| Month(4) | (a) Claim forms issued | (b) Claims received(5) |
|---|---|---|
| February 2003 | 5,500 | 3,200 |
| March 2003 | 6,500 | 3,900(6) |
| April 2003 | 7,000 | 4,000(7) |
| May 2003 | 7,200 | 4,250(8) |
(4) Final Friday in month.
(5) Including received on-line.
(6) At 9 April 2003
(7) At 28 April 2003
(8) At 3 June 2003. Excludes claims assessed as being duplicates.
Mr. Flight: To ask the Chancellor of the Exchequer with reference to (a) the tax credits figures in the third row of Table C8 of the 2003 Budget, HC 500, (b) the tax credits figures in the thirty-third row of Table C8 of the 2003 Budget, HC 500, (c) the social security benefits figures in the fifth row of Table C11 of the 2003 Budget, HC 500 and (d) the tax credits figures in the sixth row of Table C11 of the 2003 Budget, HC 500, if he will list the types of tax credit, benefits payment and other components which comprise the quoted figures; for each type of tax credit, benefit payment and other component, whether, according to the accounting methods employed in the 2003 Budget, they are classified as negative tax revenues, Government spending or a combination of the two; and for each tax credit, benefit payment and other component, what amount of tax was refunded and Government spending was incurred in each year since 2001–02 to the latest year for which figures are projected. [121327]
Dawn Primarolo: The treatment of personal tax credits in Budget reports was explained in Box C2 on page 216 of Budget 2002 (HC592). The Government have adopted best international practice as set out in OECD guidelines for the purposes of calculating net taxes and social security contributions as included in Table C8 of Budget 2003. However there are some
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differences between the OECD guidelines and National Accounts basis used for calculation of other fiscal aggregates.
(a) Row 3 of Table C8 (tax credits scoring as negative tax under OECD guidelines) includes:
- Children's Tax Credit;
Working Families' Tax Credit (WFTC)—part;
Disabled Person's Tax Credit (DPTC)—part;
Child Tax Credit—part;
Working tax credit—part;
Life assurance premium relief at source (LAPRAS)—part; and
Enhanced company tax credits for research and development and contaminated land clearance that reduce corporation tax liability.
(c) Row 5 of Table C11 (Social Security benefit expenditure) includes II social security benefits except child allowances in Income Support and Jobseekers' Allowance, and all child benefit and war pensions.
(d) Row 6 of Table C11 includes:
- Parts of Child Tax Credit, Working tax credit, WFTC, DPTC and Child allowances in Income Support and Jobseekers' Allowance, (paid as part of the Child Tax Credit from 2003–04 and included here to give consistent figures over the period of table);
LAPRAS;
Charities transitional relief; and
Tax relief on contributions to personal and stakeholder pensions made by non-taxpayers.
| Category | 2001–02 | 2002–03 | 2003–04 |
|---|---|---|---|
| (a) C8 row 3, negative tax (OECD) | -2.3 | -3.4 | -4.5 |
| Of which: | |||
| Personal tax credits(9) | -2.2 | -3.1 | -3.9 |
| Corporation tax credits | -0.1 | -0.2 | -0.5 |
| Other | -0.1 | -0.1 | -0.1 |
| (b) C8 row 33, negative tax (OECD)but spending in National Accounts | 0.9 | 1.1 | 0.6 |
| Of which: | |||
| Personal tax credits(9) | 0.7 | 0.8 | 0.0 |
| Corporation tax credits | 0.1 | 0.2 | 0.5 |
| Other | 0.1 | 0.1 | 0.1 |
| (d) C11 line 6, public expenditure | 8.7 | 9.8 | 11.7 |
| Of which: | |||
| Personal tax credits1 | 4.8 | 5.6 | 8.0 |
| IS / JSA child allowances | 3.6 | 4.0 | 3.5 |
| Other | 0.2 | 0.2 | 0.2 |
(9) Includes the relevant elements of WPTC, DPTC, Child Tax Credit and Working Tax Credit and Children's Tax Credit.
Mr. Webb: To ask the Chancellor of the Exchequer how many people who were receiving working families tax credit in March 2003 (a) received payments of child
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tax credit by the end of April 2003 and (b) had not received their child tax credit by the end of April 2003. [121970]
Dawn Primarolo [holding answer 3 July 2003]: Not all recipients of working families tax credit (WFTC) in March 2003 qualify for a child tax credit (CTC) award. Their circumstances or incomes may have changed since the beginning of their WFTC awards.
Of former WFTC recipients who by 31 March had submitted claims for CTC, were eligible for CTC, and for whom no further information was required to process the claim, the vast majority were in award by the end of April 2003.
It is not yet known how many recipients of WFTC at March 2003 have made later claims for CTC, or made claims which have required further information to process.
Dr. Kumar: To ask the Chancellor of the Exchequer how applications for tax credits received after the 5 July deadline will be treated; and if he will make a statement. [122226]
Dawn Primarolo: This year, the Inland Revenue will treat tax credits claims received before midnight on the first full working day after the deadline as qualifying for full backdating. This is to make sure that claims received by different routes are treated alike and recognises that the deadline falls at the weekend. So claims the Inland Revenue receive by midnight on Monday 7 July will be backdated to 6 April 2003, where appropriate.
People can, of course, still claim tax credits for 2003–04 after that date. Claims received after 7 July can still be backdated for up to three months. (People should therefore make their claims as soon as possible.)
Mr. Webb: To ask the Chancellor of the Exchequer if he will make a statement on the effects of administering the new tax credits on the processing by the Inland Revenue of income tax returns, with particular reference to the Inland Revenue at Bootle. [122691]
Dawn Primarolo [holding answer 30 June 2003]: The rate at which the Inland Revenue processes income tax returns varies throughout the year and from year to year. New tax credits work has had no material effect on the processing of income tax returns this year.
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