Exiting the European Union (Value Added Tax)

We will not oppose the Government on these two statutory instruments. The first set of regulations includes changes to replicate in domestic law measures that currently exist in EU law, including a VAT zero rate for handling qualifying aircraft at non-customs and excise airports. Other measures introduce a new VAT zero rate for international trains and remove a VAT exemption for pension fund management services established in the EU. I ask what assessment the Treasury has made of the impact on the tax base. The second set makes changes needed following the end of the EU exit transition period, ensuring that DIY house builders in Northern Ireland can recover VAT on goods used in construction purchased in the EU and removing VAT relief for goods moved from Northern Ireland to Great Britain for avoidance purposes. I urge the Minister to address whether there have been any substantive changes to the Government’s communication strategy for British businesses about new rules on trade with Northern Ireland or increases in capacity at the Trader Support Service.

The SNP will not oppose these motions. The first set of regulations, SI No. 1312, largely corrects a blunder by Treasury Ministers who forgot to legislate for goods crossing the channel on trains. Regulation 10 removes the VAT exemption on fees charged for managing qualifying pension funds established in an EU member state; I ask why this is necessary and what assessment has been made of its impact on UK residents with pensions managed by EU-based funds or on the competitiveness of UK financial services industry. The second set of regulations makes amendments reasonable and necessary for the smooth operation of the Northern Ireland protocol but criticises the last-minute rush job in passing the Taxation (Post-transition Period) Act 2020, urging that the Government must treat Northern Ireland better than an afterthought.

Welcomes the statutory instruments for facilitating trade but raises concerns about difficulties in implementing the Northern Ireland protocol. Asks for assurances that VAT and excise rules will be administered by UK authorities solely, ensuring smooth movement of goods between Great Britain and Northern Ireland as per previous agreements.

Echoes concerns about the true impact of the Northern Ireland protocol on free trade with GB. Highlights issues such as VAT refunds for DIY builders, supply of goods into Northern Ireland and additional administrative burdens for businesses. Questions HMRC's handling of these issues and emphasises that the protocol is damaging to the Northern Ireland economy.

The speaker criticises the complexity created by Brexit customs arrangements, highlighting the VAT retail export scheme's end on January 1st. He emphasises that scrapping this scheme risks significant economic impact including job losses and reduced international competitiveness. Carmichael also highlights issues faced by small exporters due to new customs regulations, using an example from his constituency.

The speaker supports the government's measures but acknowledges concerns about VAT-free sales to non-EU visitors. He highlights the impact of new customs regulations on small businesses in his constituency, urging for less zealous customs enforcement and simplification of arrangements.

Responded to concerns raised by other MPs, acknowledging the confusion in Northern Ireland regarding VAT regulations. Stated that the trader support service is functioning well overall and advised Members to read the tax impact and information note for clarity on expected impacts of the legislation.

Asked the Minister to address points raised previously, highlighting that while HMRC will be responsible for VAT collection, many businesses in Great Britain lack clear information about customs processes and thus are hesitant to sell to Northern Ireland due to perceived complications.