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24 Jan 2011 : Column 123W—continued
Child benefit is paid for the benefit of the child, not the claimant. It is not possible to produce a robust estimate of the average cost to men and women of such changes that would be sufficiently reliable to be useful for policy making.
(G) Changes to housing benefit
Setting local housing allowance at the 30th percentile of local rents
The Treasury has not made an estimate of the average costs or benefits to men and women. The DWP has now published a final equality impact assessment covering this measure:
Uprating of non-dependent deductions
A general equality impact assessment covering the overall uprating exercise will be published in early 2011, and DWP are preparing a separate assessment for the uprating of non-dependant deductions.
Using the consumer price index for local housing allowance and staged reductions for jobseeker's allowance claimants
An equality impact assessment will be published when relevant legislation is brought forward in early 2011.
Social sector size restriction
An equality impact assessment will be published when relevant legislation is brought forward in early 2011.
The DWP published a final equality impact assessment covering this measure:
The DWP published a final equality impact assessment covering this measure:
Additional discretionary housing payments (DHPs)
This measure is designed to provide targeted support to housing benefit claimants affected by the reforms. DHPs are made entirely at the local authority's discretion, however DWP has issued good practice guidance to local authorities on DHPs.
(H) Changes to lone parent conditionally
The DWP will publish an impact assessment in due course.
(I) Uprating in line with consumer prices index announced in the June 2010 Budget
It is not possible to calculate robust estimates of the average cost to men and women arising from the switch to CPI indexation for public sector pensions and benefits.
This is because any such estimates would be based on assumptions about future rates of inflation, which would become more uncertain in later years. There is also uncertainty about behavioural or macro-economic effects which would affect the accuracy of any estimates for later years.
Caroline Lucas: To ask the Chancellor of the Exchequer what estimate he made of the revenue forgone by the Exchequer from (a) corporation tax, (b) income tax, (c) National Insurance contributions, (d) value added tax and (e) other taxes as a result of companies being struck from the Register of Companies in (i) 2007-08, (ii) 2008-09 and (iii) 2009-10. [32826]
Mr Gauke: HM Revenue and Customs does not retain the statistical data that would allow such estimates to be made.
Kerry McCarthy: To ask the Chancellor of the Exchequer what tax relief measures are available in respect of woodland ownership; and what plans he has for the future of such measures. [34389]
Mr Gauke: Where inheritance tax would otherwise be due, a specific rule for woodlands allows for the tax to be deferred until the timber is harvested. The deferral only applies to the value of the timber not the land. In addition, a commercial business that is carried on which includes the ownership of woodland may qualify for the general exemption from inheritance tax that is available for business property.
Any profits or gains arising from the occupation of commercial woodland are wholly outside the scope of income tax or corporation tax.
All tax policies are kept under review.
Given the current economic climate, Government policy must reflect the need to reduce the budget deficit. In this context and as stated in the coalition agreement, the Government have agreed that making changes to the personal allowance for income tax should take priority over other tax cuts. Any changes to tax relief measures in respect of woodland ownership will have to be considered with due regard to the Government's priorities of reducing the fiscal deficit and ensuring economic recovery.
VAT
Damian Hinds: To ask the Chancellor of the Exchequer how many and what proportion of applications for value added tax registration resulted in a request to the applicant to provide signed and dated (a) supply contracts, (b) purchase invoices and (c) samples of advertising prior to the provision of a value added tax number; and what proportion of such requests resulted in the application being refused due to (i) suspected fraud and (ii) any other reason in financial year 2009-10. [34384]
Mr Gauke: HMRC received 207,899 applications to register for VAT in 2009-10.
Further information to support the application is requested in up to one third of cases.
These requests may include supply contracts, purchase invoices and samples of advertising but HMRC does not maintain a central record of the type of information requested, in respect of relevant registrations.
The information requested on refused applications is not available.
Mr Douglas Alexander: To ask the Chancellor of the Exchequer what estimate he has made of the change to the average net income of retired households in each income decile attributable to the proposed increase in the rate of value added tax in (a) 2010-11, (b) 2011-12, (c) 2012-13, (d) 2013-14 and (e) 2014-15. [28884]
Mr Gauke: Value added tax is an indirect tax. Although prices on certain goods and services will increase as a result of the rate increase, incomes will be unaffected.
Graeme Morrice: To ask the Chancellor of the Exchequer what estimate his Department has made of the likely effect of the proposed change in the rate of value added tax on (a) levels of unemployment in and (b) the financial effect on the construction sector in (i) the UK and (ii) Scotland. [32888]
Mr Gauke [holding answer 10 January 2011]: The answer to this question falls within the responsibilities of the Office for Budget Responsibility (OBR), and I have asked the OBR to reply.
Letter from Robert Chote, dated 13( th) January 2011:
As Chair of the Budget Responsibility Committee of the Office for Budget Responsibility, I have been asked to reply to your recent question.
The OBR's November forecast incorporated the estimated impact of policy measures announced at or before the June Budget, including the increase in the standard rate of VAT from 17.5 per cent to 20 per cent that took effect from 4 January 2011.
We have not assessed the impact of the change in VAT on levels of unemployment or the construction sector. However, the OBR applied a range of fiscal multipliers to help inform its judgement on the impact of VAT on aggregate demand in the economy. These multipliers are set out in Table C8 of the interim OBR's June Budget document. A figure of 0.6, for example, means that a measure which has a direct effect of raising revenue by 1 per cent of GDP is estimated to reduce aggregate demand in the economy by 0.6 per cent in the short run.
The interim OBR's June 2010 Budget forecast and the OBR's November forecast assumed that the increase in the standard rate of VAT from 17.5 per cent to 20 per cent would reduce the level of real GDP in 2011/12 by around 0.3 per cent.
Damian Hinds: To ask the Chancellor of the Exchequer how many and what proportion of applications for value added tax registration resulted in a request to the applicant to provide a signed tenancy agreement or mortgage statement prior to the provision of a value added tax number; and what proportion of such requests resulted in the application being refused due to (a) suspected fraud and (b) any other reason in financial year 2009-10. [34385]
Mr Gauke: HMRC received 207,889 applications to register for VAT in 2009-10.
Further information to support the application is requested in up to one-third of cases.
These requests may include a signed tenancy agreement or mortgage statement but HMRC does not maintain a central record of the type of information requested, in respect of relevant registrations.
The information requested on refused applications as a result of the request to provide a signed tenancy agreement or mortgage statement is not available.
VAT: Charities
Helen Jones: To ask the Chancellor of the Exchequer if he will make it his policy to bring forward legislative proposals to allow charities to reclaim value added tax; and if he will make a statement. [34868]
Mr Gauke: Charities can, and do, reclaim VAT subject to the normal VAT rules. They also benefit from a number of VAT zero rates and exemptions, in addition to many other tax reliefs. As far as the VAT that charities cannot recover is concerned, the Government have no plans to introduce a general refund scheme.
The Government continue to look at ways of ensuring that VAT does not act as a barrier to the reform of public services where such options are open to us and affordable within agreed funding arrangements. For example, we are continuing to work closely with charities and other sectors to explore options for implementing the EU VAT exemption for cost sharing, and the recent announcement of a new VAT refund scheme for academy schools demonstrates the Government's willingness to create a level playing field for VAT where this can be done in a fair, targeted and affordable way.
However, a general VAT recovery scheme for all charities would not be affordable or well-targeted; nor would it be fair to reimburse those charities which are in competition with other service providers.
Helen Jones: To ask the Chancellor of the Exchequer what recent discussions he has had with charities about the effect of the increase in the rate of value added tax on the services they provide. [34869]
Mr Gauke: Treasury Ministers and officials receive representations from, and regularly meet with, charity representative bodies on a range of issues, including VAT.
VAT: Tourism
Susan Elan Jones: To ask the Chancellor of the Exchequer what assessment he has made of the effects on the tourism industry of the increase in the rate of value added tax. [34459]
Mr Gauke: No specific assessment has been made of the economic impact of the VAT rate increase on the tourism industry. The impact assessment published with the Budget in June 2010 provides information on the compliance costs to business overall of the VAT rate increase, but not at sector level.
Vodafone Group: Taxation
Mr Sanders: To ask the Chancellor of the Exchequer if he will make an assessment of the potential effects of the tax settlement between HM Revenue and Customs and Vodafone Group plc on the operation of anti-avoidance rules for controlled foreign companies. [34972]
Mr Gauke: The controlled foreign companies (CFC) rules have been subject to challenge in both the European and UK courts regarding their compatibility with EC law. In 2009 the Court of Appeal found in HMRC's favour in a case brought by Vodafone. This did not determine any liability, but it allowed HMRC to open discussion with Vodafone and other customers about how the rules actually applied in practice.
The Government are also consulting on reform of the CFC rules to ensure they are more closely targeted on artificially diverted UK profits.
Welfare Tax Credits
Mr Bain: To ask the Chancellor of the Exchequer what estimate he has made of the effects on income of households in each income decile of the proposed reduction in the (a) child care element of working tax credit and (b) family element of child tax credit (i) in cash terms and (ii) as a proportion of income in each of the next five financial years. [34802]
Mr Gauke: Given the interaction of tax credit measures with other benefits, it is the overall impact of measures that is important for a household. At the June Budget and the spending review, this Government have taken the unprecedented step of publishing detailed distributional analysis of the impacts of its decisions for the first time (see for instance charts B.4 and B.5 in Annex B of the 'Spending Review 2010' document).
This analysis shows that, when Budget and spending review measures are taken together, it is clear that the top decile contributes the most to the fiscal consolidation, both in absolute terms and as a percentage of net income.
Welfare Tax Credits: Armed Forces
Mr Douglas Alexander: To ask the Chancellor of the Exchequer what estimate he has made of the number of households of armed forces personnel in receipt of tax credits. [29028]
Mr Gauke: The information is not available.
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