With this it will be convenient to discuss the following:
Amendment 4, in clause 2, page 3, line 3, at end insert—
“(3) The Chancellor of the Exchequer must lay before the House of Commons reports setting out—
(a) an assessment of the revenue that is generated by the energy (oil and gas) profits levy in the period to which the report relates,
(b) an assessment of the revenue that would have been generated in the period to which the report relates if the investment allowance had not been in effect, and
(c) the names of companies that have made use of the investment allowance and the revenue that would have been generated by them during the period to which the report relates if the investment allowance had not been in effect.
(4) The first report under subsection (3) shall be laid as soon as practicable after the 1 January 2023, in respect of the period 26 May 2022 to 1 January 2023.
(5) Subsequent reports under this section shall be laid every three months thereafter, and in respect of the period since the last report.”
This amendment would require the Government to produce an assessment of how much revenue would be generated by the Energy Profits Levy if the relief for investment expenditure had not been in effect, and to produce a quarterly report assessing how much revenue has been forgone because of the investment expenditure relief.
Clause 2 stand part.
Amendment 3, in clause 3, page 3, line 14, at end insert—
“(3) The Chancellor of the Exchequer must, within six months of this section coming into force, lay before the House of Commons an assessment of the revenue that would have been generated if, in section 1 of the Energy (Oil and Gas) Profits Levy Act 2022 (charge to tax), in subsection (3) (which sets out the accounting periods by reference to which the tax is charged), in paragraph (a), for ‘26 May 2022’, there had been substituted ‘6 October 2021’.”
This amendment would require the Government to produce an assessment of how much revenue would be generated by the Energy Profits Levy if it had been introduced on 6th October 2021.
Clauses 3 and 4 stand part.
Amendment 2, in clause 5, page 4, line 6, at end insert—
“(5) HMRC must contact every individual affected by the provisions of this section to inform them whether, as a result of the provisions of this section—
(a) they have become liable to pay the basic rate of income tax (when they were not previously so liable);
(b) they have become liable to pay the higher rate of income tax (when they were not previously so liable); and
(c) how much additional income tax they will pay as a result of the change.”
This amendment would require HMRC to contact every individual who become liable to pay standard tax or move from standard to higher rate, and how much additional tax they will have to pay as a result.
Clauses 5 to 9 stand part.
Amendment 5, in clause 10, page 7, line 23, at end insert—
“(8) The Chancellor of the Exchequer must, within six month of this section coming into force, and quarterly thereafter, lay before the House of Commons an assessment of the impact of the changes in this section on—
(a) the Secretary of State’s ability to meet the duty set out in section 1 of the Climate Change Act 2008,
(b) air pollution in the United Kingdom, and
(c) the provision of electric vehicle infrastructure and public transport in the United Kingdom.”
This amendment would require the Chancellor to produce quarterly assessments of the impact of the removal of VED exemption for electrically propelled vehicles on the UK’s climate change duties, air pollution and EV infrastructure and public transport.
Clauses 10 to 12 stand part.
New clause 1—Assessment of the impact of the investment allowance—
“(1) The Chancellor of the Exchequer must, within six months of this Act coming into force, publish an assessment of—
(a) the revenue that the energy (oil and gas) profits levy will yield,
(b) the revenue that the energy (oil and gas) profits levy would yield if the investment allowance did not have effect in respect of investment expenditure, and
(c) the revenue that the energy (oil and gas) profits levy would yield if the investment allowance did not have effect in respect of expenditure on decarbonisation by oil and gas companies.
(2) The assessment must cover the whole period that the levy is in effect and also assess the revenue in each tax year.
(3) The assessment must include an evaluation of the impact of the investment allowance on the United Kingdom’s ability to meet its climate commitments, including—
(a) the target for 2050 set out in section 1 of the Climate Change Act 2008,
(b) applicable carbon budgets made pursuant to section 4 of the Climate Change Act 2008, and
(c) the commitment given by the government of the United Kingdom in the Glasgow Climate Pact to pursue policies to limit global warming to 1.5 degrees Celsius.”
This new clause would require the Government to publish an assessment of the impact of the investment allowance on revenue raised by the Energy (Oil and Gas) Profits Levy, including investment by oil and gas companies in UK oil and gas extraction and upstream decarbonisation. The assessment should also cover the impact of the investment allowance on the UK’s ability to meet its domestic and international climate targets.
New clause 2—Review of revenue from the Energy (Oil and Gas) Profits Levy—
“(1) The Chancellor of the Exchequer must, within three months of this Act receiving Royal Assent, publish an assessment of the revenue estimated to be generated from the Energy (Oil and Gas) Profit Levy in each of the financial years 2021-22 to 2027-28.
(2) In addition to an evaluation of the revenue forecast to be raised by the Levy, the assessment must include an evaluation showing the estimated revenue that would have been raised if each of the following had been the case—
(a) the qualifying accounting period specified in section 1(3) of the Energy (Oil and Gas) Profits Levy Act 2022 had begun on 3 January 2022,
(b) the rate of the levy had been increased to 38% under this Act, and
(c) the amount of additional investment expenditure had been reduced to 0% by this Act.”
This new clause would require the Chancellor of the Exchequer to publish an assessment of estimated revenue from the energy (oil and gas) profit levy in financial years 2021-22 to 2027-28, and set out how these figures would be affected if levy were backdated to 3 January 2022, and if the rate of levy was increased to 38%, and the amount of additional investment expenditure reduced to 0%, by this Act.
New clause 3—Research and Development tax relief policy—
“(1) The Chancellor of the Exchequer must, within three months of this Act receiving Royal Assent, publish an assessment of research and development tax relief for small or medium-sized enterprises.
(2) The assessment must include the Chancellor’s assessment of the effectiveness of R&D tax reliefs and plans he has to further reform of R&D tax reliefs.”
This new clause would require the Government to publish an assessment of their view on the effectiveness of R&D tax reliefs for small and medium-sized enterprises and their intentions for any further reform.
New clause 4—Research and Development tax relief fraud and waste—
“(1) The Chancellor of the Exchequer must, within three months of this Act receiving Royal Assent, publish an assessment of research and development tax relief for small or medium-sized enterprises.
(2) This assessment must include the following, in respect of each tax year since 2018–19—
(a) an evaluation of the amount of money that has been incorrectly deducted as a qualifying cost, or incorrectly paid as a tax credit, as a result of—
(i) fraud, and
(ii) error,
(b) set out, in relation to sums incorrectly deducted as a qualifying cost, or incorrectly paid as a tax credit—
(i) how many investigations have taken place,
(ii) how many prosecutions have been brought,
(iii) how many prosecutions have resulted in a conviction, and
(iv) how much money has been reclaimed.”
This new clause would require the Government to publish a statement on error and fraud in the SME R&D tax reliefs, including details of what actions they have taken in response.
New clause 5—Assessment of the impact of changes to the basic rate limit and personal allowance for tax years 2026-27 and 2027-28—
“The Chancellor of the Exchequer must, within three months of this Act coming into force, publish an assessment of the expected impact on an average earner of the provisions of section 5 (Basic rate limit and personal allowance for tax years 2026–27 and 2027–28).”
This new clause will require the Chancellor of the Exchequer to publish an assessment of the impact on average earners of the decision to freeze the basic rate limit and personal allowances for tax years 2026/27 and 2027/28.
New clause 6—Impact assessment of measures in the Act—
“(1) The Chancellor of the Exchequer must, within three months of this Act coming into force, publish an assessment of the impact of the provisions of this Act.
(2) This assessment must consider the effects of the provisions of the Act on—
(a) different regions and nations of the United Kingdom,
(b) people with different protected characteristics under the Equality Act 2010, and
(c) people with a range of different incomes.”
This new clause will require the Chancellor of the Exchequer to publish an assessment of the impact of the measures in this Act on people in different parts of the United Kingdom, and on groups of people with different protected characteristics and incomes.
New clause 7—Assessment of the impact of measures in the Act on growth—
“(1) The Chancellor of the Exchequer must, within three months of this Act coming into force, publish an assessment of the impact of provisions of this Act on economic growth.
(2) This assessment must consider the forecast impact of measures in this Act on growth of—
(a) the UK economy as whole,
(b) the economy of different regions and nations on the UK, and
(c) average incomes in the UK.”
This new clause will require the Chancellor of the Exchequer to publish an assessment of the impact of measures in this Act on growth in the UK economy, as well as its impact on growth in different regions and nations of the UK, and its impact on growth of average incomes.
New clause 9—Assessment of investment relief on compliance with the climate change target for 2050—
“The Chancellor of the Exchequer must, within six months of this section coming into force, and quarterly thereafter, lay before the House of Commons an assessment of the impact of the effect of the relief for investment expenditure provided in sections 1 and 2 of the Energy (Oil and Gas) Profits Levy Act 2022 on—
(a) the Secretary of State’s ability to meet the duty set out in section 1 of the Climate Change Act 2008, and
(b) the additional quantity of carbon dioxide that will be generated in the United Kingdom.”
This new clause would require the Chancellor to produce an assessment of the impact of the relief for investment expenditure in relation to the Energy Profits Levy on the Secretary of State’s ability to meet the target of ensuring that the net UK carbon account for the year 2050 is at least 100% lower than the 1990 baseline. And produce a report each quarter detailing how much additional CO2 has been produced because of the investment expenditure relief.
New clause 10—Review of effect on small businesses—
“(1) The Chancellor of the Exchequer must lay before Parliament within six months of the passing of this Act a review of the impact of the measures contained in this Act on small businesses.
(2) The review must consider in particular the impact of those measures on the ability of small businesses to—
(a) meet their energy bills,
(b) minimise their debt,
(c) pay their rent,
(d) remain solvent, and
(e) employ staff.
(3) The review must include an assessment of the number of small businesses which will become liable to register for VAT as a result of the measures contained in this Act.
(4) In this section, ‘small businesses’ means any business which has average headcount of staff of less than 50 in the tax year 2022-23.”
This new clause would require the Government to produce an impact assessment of the effect of the Act on small businesses.