HM Treasury is the government’s economic and finance ministry, maintaining control over public spending, setting the direction of the UK’s economic policy and working to achieve strong and sustainable economic growth.
This inquiry will examine quantitative tightening, including its impact on the economy and its fiscal costs. It will also investigate …
Oral Answers to Questions is a regularly scheduled appearance where the Secretary of State and junior minister will answer at the Dispatch Box questions from backbench MPs
Other Commons Chamber appearances can be:Westminster Hall debates are performed in response to backbench MPs or e-petitions asking for a Minister to address a detailed issue
Written Statements are made when a current event is not sufficiently significant to require an Oral Statement, but the House is required to be informed.
HM Treasury does not have Bills currently before Parliament
A Bill to Authorise the use of resources for the year ending with 31 March 2026; to authorise both the issue of sums out of the Consolidated Fund and the application of income for that year; and to appropriate the supply authorised for that year by this Act and by the Supply and Appropriation (Anticipation and Adjustments) Act 2025.
This Bill received Royal Assent on 21st July 2025 and was enacted into law.
A Bill to make provision about secondary Class 1 contributions.
This Bill received Royal Assent on 3rd April 2025 and was enacted into law.
A Bill to make provision about finance.
This Bill received Royal Assent on 20th March 2025 and was enacted into law.
A Bill to amend the Crown Estate Act 1961.
This Bill received Royal Assent on 11th March 2025 and was enacted into law.
A Bill to Authorise the use of resources for the years ending with 31 March 2024, 31 March 2025 and 31 March 2026; to authorise the issue of sums out of the Consolidated Fund for those years; and to appropriate the supply authorised by this Act for the years ending with 31 March 2024 and 31 March 2025.
This Bill received Royal Assent on 11th March 2025 and was enacted into law.
A Bill to make provision for loans or other financial assistance to be provided to, or for the benefit of, the government of Ukraine.
This Bill received Royal Assent on 16th January 2025 and was enacted into law.
A Bill to impose duties on the Treasury and the Office for Budget Responsibility in respect of the announcement of fiscally significant measures.
This Bill received Royal Assent on 10th September 2024 and was enacted into law.
A Bill to authorise the use of resources for the year ending with 31 March 2025; to authorise both the issue of sums out of the Consolidated Fund and the application of income for that year; and to appropriate the supply authorised for that year by this Act and by the Supply and Appropriation (Anticipation and Adjustments) Act 2024.
This Bill received Royal Assent on 30th July 2024 and was enacted into law.
e-Petitions are administered by Parliament and allow members of the public to express support for a particular issue.
If an e-petition reaches 10,000 signatures the Government will issue a written response.
If an e-petition reaches 100,000 signatures the petition becomes eligible for a Parliamentary debate (usually Monday 4.30pm in Westminster Hall).
Raise the income tax personal allowance from £12,570 to £20,000
Gov Responded - 20 Feb 2025 Debated on - 12 May 2025Raise the income tax personal allowance from £12570 to £20000. We think this would help low earners to get off benefits and allow pensioners a decent income.
Don't change inheritance tax relief for working farms
Gov Responded - 5 Dec 2024 Debated on - 10 Feb 2025We think that changing inheritance tax relief for agricultural land will devastate farms nationwide, forcing families to sell land and assets just to stay on their property. We urge the government to keep the current exemptions for working farms.
Don't apply VAT to independent school fees, or remove business rates relief.
Gov Responded - 20 Dec 2024 Debated on - 3 Mar 2025Prevent independent schools from having to pay VAT on fees and incurring business rates as a result of new legislation.
Commons Select Committees are a formally established cross-party group of backbench MPs tasked with holding a Government department to account.
At any time there will be number of ongoing investigations into the work of the Department, or issues which fall within the oversight of the Department. Witnesses can be summoned from within the Government and outside to assist in these inquiries.
Select Committee findings are reported to the Commons, printed, and published on the Parliament website. The government then usually has 60 days to reply to the committee's recommendations.
Similarly, the activation code for a customer to add corporation tax (CT) services to their business tax account must be delivered by a secure process. HMRC are investing in their legacy corporation tax system in order to provide the foundation for future improvements and will work with customers to ensure that they meet the needs of the diverse CT population.
Making Tax Digital (MTD) modernises the tax system and will help businesses and landlords keep on top of their tax affairs. It places small businesses on a more digital footing, with digital tools helping to reduce errors and making annual tax returns easier.
Through a diverse market of accessible, intuitive software, MTD encourages businesses to embrace digital solutions boosting productivity, streamlining operations, and supporting sustainable growth.
The latest published assessment of MTD for Income Tax impacts is available at:
The department collects data via an access control system to allow monitoring of office attendance. This system does not provide this data at individual level.
Managers are required to ensure employees meet the minimum office attendance targets and they have a number of management tools at their disposal to ensure compliance including both our formal and informal disciplinary procedures. We do not hold central records on the usage of such procedures.
The Government understands the concerns that have been raised about the High Income Child Benefit Charge (HICBC), including its potential impact on high earning single parents. However, introducing a threshold for single parents, or basing the charge on household rather than individual incomes, would come at a significant fiscal cost if we were to ensure that no families lose out. By withdrawing Child Benefit from high-income parents where the higher earner earns £60,000 or more, the HICBC helps to ensure the sustainability of the public finances and protect our vital public services.
The Government is committed to making sure the wealthiest in our society pay their fair share of tax. That is why the Chancellor announced a series of reforms at Autumn Budget 2024 to help fix the public finances in as fair a way as possible. These and other decisions announced at the Budget will help repair the public finances and fund public services such as the NHS and education.
The Government keeps all taxes under review as part of the tax policy making process. Any tax changes are generally announced at Budget where decisions are taken in the round.
HMRC is not able to provide a comparative assessment of the average processing times for (a) VAT and (b) Corporation Tax registration by (i) HMRC and (ii) other countries in the Organisation for Economic Co-operation and Development (OECD).
The OECD do not publish information of this nature.
Estimates for the additional static revenue expected to be raised from the employer NICs changes, announced at Autumn Budget 2024 and which came into force in April 2025, can be found in the OBR Supplementary forecast information on static costing of changes to Employer National Insurance Contributions.
Further information, including on behavioural impacts can be found in Chapter 3.8 of the OBR Economic and fiscal outlook – October 2024.
HMT is committed to enhancing the working lives of all employees by supporting a healthy balance between professional responsibilities and personal commitments. To support this, HMT offers a Flexible Working Hours Scheme (FWHS), which allows employees to vary their start and finish times across the working week to achieve a balance between the demands of their jobs and personal commitments.
As at the end of financial quarter 1 for 2025/26 (30th June 2025), there were 160 active staff at HMT working full-time compressed hours.
Appointments to the HMT Board are regulated by the Office of the Commissioner for Public Appointments. Sir Charlie Mayfield, Edward Twiddy and Jenny Scott have not engaged in any political activity in the last five years.
The UK is committed to working with all stakeholders to ensure inclusive and effective international tax cooperation, and has been actively engaging in negotiations at the UN over a future Framework Convention, including the recent informal sessions for the technical workstreams.
The UK believes that a UN Tax Framework Convention has the potential to further advance international tax cooperation, but to be successful, it needs to be clear in its aims, avoid duplicating initiatives, and seek to secure the broad support and participation of members.
HMT does not provide an annual allowance for works to be undertaken on the Chancellor’s flat in Downing Street.
The VOA is working as quickly as possible to clear cases, and moving staff to where there is the greatest customer demand. The VOA is focusing on the oldest cases first, and where customers are facing financial hardship.
The VOA is replacing IT systems with modern cloud-based platforms that will deliver significant efficiencies. It is also upskilling its workforce to ensure there is flexibility in managing a wide range of cases and improving its digital services to make it easier for customers to self-serve.
The level of the charge depends on the good or service being supplied. VAT only needs to be accounted for by VAT-registered businesses, and at £90,000, the UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD. This keeps the majority of businesses out of the VAT regime altogether.
This Government remains committed to supporting pensioners and giving them the dignity and security they deserve in retirement.
The commitment to protect the Triple Lock saw over 12 million pensioners benefit from a 4.1% increase to their basic or new State Pension in April 2025. Over the course of this Parliament, the full yearly rate of the new State Pension is expected to increase by around £1,900 based on the Office for Budget Responsibility’s latest forecast.
The Personal Allowance will continue to exceed the basic and full new State Pension in 2025/26. This means pensioners whose sole income is the full new State Pension or basic State Pension without any increments will not pay any income tax.
The previous Government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028. The current Government is committed to keeping people’s taxes as low as possible while ensuring fiscal responsibility and so decided not to extend the freeze on personal tax thresholds at Budget 2025.
From this winter pensioners with incomes below or equal to £35,000 will benefit from Winter Fuel Payments from this winter. This threshold is broadly in line with average earnings. It ensures the vast majority of pensioners – over three quarters, and around 9 million individuals in England and Wales - will receive support. It also ensures the means testing of Winter Fuel Payments has no effect on pensioner poverty. The relevant impact assessments are available on gov.uk:
Equality Impact Assessments produced for targeting Winter Fuel Payment - GOV.UK
Winter Fuel Payments eligibility change - internal modelling on pensioner poverty levels - GOV.UK.
This Government remains committed to supporting pensioners and giving them the dignity and security they deserve in retirement.
The commitment to protect the Triple Lock saw over 12 million pensioners benefit from a 4.1% increase to their basic or new State Pension in April 2025. Over the course of this Parliament, the full yearly rate of the new State Pension is expected to increase by around £1,900 based on the Office for Budget Responsibility’s latest forecast.
The Personal Allowance will continue to exceed the basic and full new State Pension in 2025/26. This means pensioners whose sole income is the full new State Pension or basic State Pension without any increments will not pay any income tax.
The previous Government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028. The current Government is committed to keeping people’s taxes as low as possible while ensuring fiscal responsibility and so decided not to extend the freeze on personal tax thresholds at Budget 2025.
From this winter pensioners with incomes below or equal to £35,000 will benefit from Winter Fuel Payments from this winter. This threshold is broadly in line with average earnings. It ensures the vast majority of pensioners – over three quarters, and around 9 million individuals in England and Wales - will receive support. It also ensures the means testing of Winter Fuel Payments has no effect on pensioner poverty. The relevant impact assessments are available on gov.uk:
Equality Impact Assessments produced for targeting Winter Fuel Payment - GOV.UK
Winter Fuel Payments eligibility change - internal modelling on pensioner poverty levels - GOV.UK.
This Government remains committed to supporting pensioners and giving them the dignity and security they deserve in retirement.
The commitment to protect the Triple Lock saw over 12 million pensioners benefit from a 4.1% increase to their basic or new State Pension in April 2025. Over the course of this Parliament, the full yearly rate of the new State Pension is expected to increase by around £1,900 based on the Office for Budget Responsibility’s latest forecast.
The Personal Allowance will continue to exceed the basic and full new State Pension in 2025/26. This means pensioners whose sole income is the full new State Pension or basic State Pension without any increments will not pay any income tax.
The previous Government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028. The current Government is committed to keeping people’s taxes as low as possible while ensuring fiscal responsibility and so decided not to extend the freeze on personal tax thresholds at Budget 2025.
From this winter pensioners with incomes below or equal to £35,000 will benefit from Winter Fuel Payments from this winter. This threshold is broadly in line with average earnings. It ensures the vast majority of pensioners – over three quarters, and around 9 million individuals in England and Wales - will receive support. It also ensures the means testing of Winter Fuel Payments has no effect on pensioner poverty. The relevant impact assessments are available on gov.uk:
Equality Impact Assessments produced for targeting Winter Fuel Payment - GOV.UK
Winter Fuel Payments eligibility change - internal modelling on pensioner poverty levels - GOV.UK.
This Government remains committed to supporting pensioners and giving them the dignity and security they deserve in retirement.
The commitment to protect the Triple Lock saw over 12 million pensioners benefit from a 4.1% increase to their basic or new State Pension in April 2025. Over the course of this Parliament, the full yearly rate of the new State Pension is expected to increase by around £1,900 based on the Office for Budget Responsibility’s latest forecast.
The Personal Allowance will continue to exceed the basic and full new State Pension in 2025/26. This means pensioners whose sole income is the full new State Pension or basic State Pension without any increments will not pay any income tax.
The previous Government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028. The current Government is committed to keeping people’s taxes as low as possible while ensuring fiscal responsibility and so decided not to extend the freeze on personal tax thresholds at Budget 2025.
From this winter pensioners with incomes below or equal to £35,000 will benefit from Winter Fuel Payments from this winter. This threshold is broadly in line with average earnings. It ensures the vast majority of pensioners – over three quarters, and around 9 million individuals in England and Wales - will receive support. It also ensures the means testing of Winter Fuel Payments has no effect on pensioner poverty. The relevant impact assessments are available on gov.uk:
Equality Impact Assessments produced for targeting Winter Fuel Payment - GOV.UK
Winter Fuel Payments eligibility change - internal modelling on pensioner poverty levels - GOV.UK.
This Government remains committed to supporting pensioners and giving them the dignity and security they deserve in retirement.
The commitment to protect the Triple Lock saw over 12 million pensioners benefit from a 4.1% increase to their basic or new State Pension in April 2025. Over the course of this Parliament, the full yearly rate of the new State Pension is expected to increase by around £1,900 based on the Office for Budget Responsibility’s latest forecast.
The Personal Allowance will continue to exceed the basic and full new State Pension in 2025/26. This means pensioners whose sole income is the full new State Pension or basic State Pension without any increments will not pay any income tax.
The previous Government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028. The current Government is committed to keeping people’s taxes as low as possible while ensuring fiscal responsibility and so decided not to extend the freeze on personal tax thresholds at Budget 2025.
From this winter pensioners with incomes below or equal to £35,000 will benefit from Winter Fuel Payments from this winter. This threshold is broadly in line with average earnings. It ensures the vast majority of pensioners – over three quarters, and around 9 million individuals in England and Wales - will receive support. It also ensures the means testing of Winter Fuel Payments has no effect on pensioner poverty. The relevant impact assessments are available on gov.uk:
Equality Impact Assessments produced for targeting Winter Fuel Payment - GOV.UK
Winter Fuel Payments eligibility change - internal modelling on pensioner poverty levels - GOV.UK.
This Government remains committed to supporting pensioners and giving them the dignity and security they deserve in retirement.
The commitment to protect the Triple Lock saw over 12 million pensioners benefit from a 4.1% increase to their basic or new State Pension in April 2025. Over the course of this Parliament, the full yearly rate of the new State Pension is expected to increase by around £1,900 based on the Office for Budget Responsibility’s latest forecast.
The Personal Allowance will continue to exceed the basic and full new State Pension in 2025/26. This means pensioners whose sole income is the full new State Pension or basic State Pension without any increments will not pay any income tax.
The previous Government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028. The current Government is committed to keeping people’s taxes as low as possible while ensuring fiscal responsibility and so decided not to extend the freeze on personal tax thresholds at Budget 2025.
From this winter pensioners with incomes below or equal to £35,000 will benefit from Winter Fuel Payments from this winter. This threshold is broadly in line with average earnings. It ensures the vast majority of pensioners – over three quarters, and around 9 million individuals in England and Wales - will receive support. It also ensures the means testing of Winter Fuel Payments has no effect on pensioner poverty. The relevant impact assessments are available on gov.uk:
Equality Impact Assessments produced for targeting Winter Fuel Payment - GOV.UK
Winter Fuel Payments eligibility change - internal modelling on pensioner poverty levels - GOV.UK.
This Government remains committed to supporting pensioners and giving them the dignity and security they deserve in retirement.
The commitment to protect the Triple Lock saw over 12 million pensioners benefit from a 4.1% increase to their basic or new State Pension in April 2025. Over the course of this Parliament, the full yearly rate of the new State Pension is expected to increase by around £1,900 based on the Office for Budget Responsibility’s latest forecast.
The Personal Allowance will continue to exceed the basic and full new State Pension in 2025/26. This means pensioners whose sole income is the full new State Pension or basic State Pension without any increments will not pay any income tax.
The previous Government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028. The current Government is committed to keeping people’s taxes as low as possible while ensuring fiscal responsibility and so decided not to extend the freeze on personal tax thresholds at Budget 2025.
From this winter pensioners with incomes below or equal to £35,000 will benefit from Winter Fuel Payments from this winter. This threshold is broadly in line with average earnings. It ensures the vast majority of pensioners – over three quarters, and around 9 million individuals in England and Wales - will receive support. It also ensures the means testing of Winter Fuel Payments has no effect on pensioner poverty. The relevant impact assessments are available on gov.uk:
Equality Impact Assessments produced for targeting Winter Fuel Payment - GOV.UK
Winter Fuel Payments eligibility change - internal modelling on pensioner poverty levels - GOV.UK.
Infected Blood compensation payments are relieved from inheritance tax under Schedule 15 of the Finance Act 2020. This is applied to the estate of the recipient of the compensation payment. Where these payments are subsequently inherited, they become part of the beneficiary’s estate and are subject to standard inheritance tax rules, in line with normal practice for compensation schemes.
This ensures victims receive full compensation without tax burdens whilst maintaining fairness in the tax system and protecting the public finances.
In recent years, HM Revenue and Customs (HMRC) has deployed additional resources to tackle landfill tax fraud and support the Joint Unit of Waste Crime (JUWC) and other agencies to identify and tackle wider waste crime. HMRC created a team to monitor high risk waste producers to deter misdescription at source and reduce non-compliance across the sector. It has increased compliance activity with landfill site operators to ensure they are complying with legislative requirements.
The government set out in the Consultation on the reform of Landfill Tax that as part of its Landfill Tax Review it would consider options for structural changes to the tax and the potential impacts on Landfill Tax fraud. This is alongside wider environmental regulatory reforms designed to improve compliance and tackle waste crime.
The conditional exemption tax incentive scheme was introduced to preserve and protect the national heritage for the benefit of the public. The Government keeps all tax policy under review, and any changes are set out at fiscal events.
The wine industry makes a vital contribution to our economy and society. We also know the sector has found economic conditions challenging over the past few years, in part due to the pandemic, energy costs, and the cost-of-living crisis.
As you know, a cut, or even a freeze, to alcohol duty represents a cost to the Exchequer. The baseline assumption is that alcohol duty will be increased annually, so that it does not fall in real terms. As with all taxes, the Government welcomes representations from stakeholders to inform policy development.
No comparative assessment has been completed of the IT systems. HMRC and Companies House have a joint commitment on sharing data and analytics to tackle corporate fraud relating to accounting and registration services.
The higher rates of Stamp Duty Land Tax (SDLT) apply to the purchases of additional residential property, including second homes and buy-to-let investments. A refund of the additional 5% rate may be claimed if the previous main residence is sold within three years of acquiring the new one. In some circumstances, for example, armed forces personnel may not meet the higher rates refund criteria if renting out their home whilst living in service family accommodation or where they are posted away or deployed overseas for long periods.
As SDLT returns do not collect details of the employment status of purchasers we are unable to make a quantative assessment of the number of serving armed forces personnel who have incurred the higher rate of SDLT on the purchase of additional dwellings or of those able to successfully meet the refund criteria.
At £90,000, the UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD. This keeps the majority of businesses out of the VAT regime altogether.
Any change to the threshold would have potential impacts on small businesses, the economy as a whole, and tax revenues, which the Government would need to consider carefully. The Government keeps all taxes under review and any changes are announced at fiscal events.
The Government recognises the significant contribution made by hospitality and tourism businesses, including those in rural areas, to economic growth and social life in the UK.
To deliver our manifesto pledge, from 2026/27, we intend to introduce permanently lower tax rates for retail, hospitality, and leisure (RHL) properties, including hotels, with rateable values below £500,000. This permanent tax cut will ensure that they benefit from much-needed certainty and support.
Ahead of these new multipliers being introduced, the Government recognises that businesses will need support in 2025/26. As such, we prevented the current RHL relief from ending in April 2025, extending it for one year at 40 per cent up to a cash cap of £110,000 per business, and we froze the small business multiplier.
When the new, permanently lower tax rates are set at Budget 2025, the Treasury intends to publish analysis of the effects of the new multiplier arrangements.
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. The UK’s VAT rate of 20 per cent is close to the OECD average of 19.3 per cent. The UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD, at £90,000. This keeps the majority of businesses out of the VAT regime altogether.
The Government consultation on proposals to simplify the current gambling tax system by merging the three current taxes that cover remote (including online) gambling into one closed on 21 July 2025. Responses are now being analysed and a response to the consultation will be published at Autumn Budget 2025.
The Government recognises the significant cultural and economic value of British horseracing, both as a major sporting tradition and as an important contributor to rural economies across the country and is engaging with representatives of the horseracing industry to understand the impact of any tax changes, which will be carefully considered as part of the consultation process.
The Government recognises the significant contribution made by hospitality and tourism businesses to economic growth and social life in the UK.
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. The UK’s VAT rate of 20 per cent is close to the OECD average of 19.3 per cent. The UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD, at £90,000. This keeps the majority of businesses out of the VAT regime altogether.
At Autumn Budget 2024, fuel duty was frozen at the current rate of 52.95 pence per litre for 2025/26, at a projected cost of £3,015m in 2025/26. The OBR estimated in its March 2025 Economic and Fiscal Outlook that if the duty rate were to remain unchanged at its current level throughout the forecast period it would reduce receipts, on average, by £3.8 billion a year between 2026/27 and 2029/30.
Fuel duty was also frozen for 2024/25 by the previous government at Spring Budget 2024, at a projected cost of £3,090m in 2024/25.
HMRC has published guidance on the definition of 'main residence' for Stamp Duty Land Tax (SDLT) purposes which is available at: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09812. This guidance applies to all purchasers, including serving armed forces personnel living in Service Family Accommodation.
The guidance explains that a property can only be considered a replacement of a main residence if the previous home was both owned and occupied by the purchaser (or their spouse/civil partner) as their main residence. Where a purchaser previously lived in accommodation which they (or their spouse or civil partner) did not own – such as Service Family Accommodation – then moving out of this accommodation does not count as replacing their main residence for SDLT purposes. Determining a 'main residence' involves assessing all relevant facts and circumstances, including the purchaser’s intention at the time of acquisition.
I can confirm that no fees are charged when payment is made using a personal debit card.
Fees only apply when using a corporate credit or corporate debit card, and these are in place to cover the processing costs charged by Visa/Mastercard, the Scheme Issuer and the Merchant Acquirer.
To avoid these charges, a range of alternative methods are available to customers including Direct Debit and all the bank transfer payment options.
Payments by personal credit cards are not accepted by HMRC as the associated processing costs for these cards are prohibitive.
The Government is fully committed to the transition to electric vehicles and a strong second-hand market for EVs plays an important role in this.
The Company Car Tax regime helps support the used electric vehicle markets, where electric company cars are sold after the end of their lease.
The majority of cars are bought in the UK’s second hand markets. At Autumn Budget the Government announced new Company Car Tax rates for 2028-29 and 2029-30 which will maintain very generous incentives to support electric vehicle take-up, and therefore the entry of electric vehicles into the second-hand market.
Stamp Duty Land Tax (SDLT) returns do not collect details of the employment status of purchasers. For this reason, HM Revenue and Customs is unable to provide details of the number of serving armed forces personnel who have incurred the higher rate of SDLT on the purchase of additional dwellings.
From 6 April 2027 most unused pension funds and death benefits will be included within the value of a person’s estate for Inheritance Tax purposes.
This change was announced on 30 October 2024 and will only impact those who die on or after 6 April 2027. There are no plans to change this commencement date. The government has published draft legislation in July 2025 for technical consultation and will publish full guidance ahead of these changes coming into effect.
HMRC engaged with stakeholders prior to clarifying the policy on the VAT treatment of voluntary carbon credits in 2024.
As of 1 September 2024, payments made to non-statutory carbon offsetting projects for the purchase of voluntary carbon credits are in the scope of VAT where the place of supply is the UK. Payments made to international carbon offsetting projects are outside the scope of UK VAT.
Making Tax Digital (MTD) for Income Tax quarterly updates are not the same as tax returns. They are simple, unadjusted summaries of income and expenditure, populated automatically through software and easily submitted. The latest published assessment of MTD for Income Tax impacts is available at:
The government has worked with the software industry to ensure a wide range of software choices to suit varying needs and budgets including free and low-cost software options. HMRC's software choices page can be found here:
Quarterly updates will support taxpayers in getting get their tax right and allow customers to call-up estimates of their emerging liability on-demand throughout the tax year. This helps ensure everyone pays the right amount of tax at the right time
There are a wide range of factors to take into consideration when introducing or widening a tax relief or exemption. These include how effective the exemption would be at achieving the policy intent, how targeted support would be and the cost.
The Government keeps all taxes under review as part of the policy making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way.
HMRC has always maintained that it would not offer its own software products for Making Tax Digital. This helps to ensure a competitive market which will better support taxpayers with a flexible and tailored range of software that integrates with other business management tools. This includes free and low-cost options, which would be undermined by an HMRC produced solution. Third party developers are also well placed to build the necessary help and support within their products that is particularly important for unrepresented customers or those who do not already use digital tools to manage their affairs.
The Government is committed to making sure the wealthiest in our society pay their fair share of tax. That is why the Chancellor announced a series of reforms at Autumn Budget 2024 to help fix the public finances in as fair a way as possible. These and other decisions announced at the Budget will help repair the public finances and fund public services such as the NHS and education.
According to the latest OECD data, the UK raises more from taxing wealth both in revenue, and as a proportion of its tax base, than Spain, Switzerland, and Norway.
A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to employer National Insurance contributions (NICs). The TIIN sets out the impact of the policy on the exchequer, the economic impacts of the policy, and the impacts on individuals, businesses, and civil society organisations, as well as an overview of the equality impacts.
The Office for Budget Responsibility also published the Economic and Fiscal Outlook (EFO), which sets out a detailed forecast of the economy and public finances. With all policies considered, the OBR's March 2025 EFO forecasts the employment level to increase from 33.6 million in 2024 to 34.8 million in 2029.
The hospitality sector is predominately made up of smaller businesses. The Government decided to protect the smallest businesses from these changes by increasing the Employment Allowance from £5,000 to £10,500. This means that this year, 865,000 employers will pay no NICs at all, and more than half of all employers will either gain or will see no change.
From 2026-27, the Government intends to introduce permanently lower business rates multipliers for RHL properties with an RV below £500,000. Ahead of then, the Government has prevented RHL business rates relief from ending, extending it for one year at 40 per cent up to a cash cap of £110,000 per business, and frozen the small business multiplier.
The Government is not under an obligation to carry out or publish a specific Welsh language impact assessment of tax policies. However, it is not expected there will be any material impact on the opportunities of individuals to use the Welsh language following these reforms.
The supply of drugs is subject to VAT at the standard rate unless an exception applies. One of these exceptions is that the zero rate of VAT is applied when a drug is supplied to an individual for personal use on prescription and dispensed by a registered pharmacist. These supplies may be made by the NHS or private pharmacies.
In July 2025, the Government laid the draft Human Medicines (Authorisation by Pharmacists and Supervision by Pharmacy Technicians) Order 2025, which will enable pharmacists to authorise registered pharmacy technicians to carry out, or supervise others carrying out, the preparation, assembly, dispensing, and sale and supply of medicines. The Government intends to legislate to enable medicines dispensed by or under the supervision of a registered pharmacy technician to benefit from the zero rate of VAT.
The Government is creating a fairer business rates system that protects the high street, supports investment, and is fit for the 21st century.
From April 2026, we intend to introduce permanently lower tax rates for retail, hospitality, and leisure (RHL) properties with rateable values (RVs) below £500,000.
This tax cut must be sustainably funded, and so we intend to introduce a higher rate on the most valuable properties from April 2026 - those with RVs of £500,000 and above. These represent less than one per cent of all properties, but cover the majority of large distribution warehouses, including those used by online giants.
The new business rates multipliers will be set at Budget 2025 so that the Government can take into account the upcoming revaluation outcomes as well as the economic and fiscal context. When the new multipliers are set, HM Treasury intends to publish analysis of the expected effects of the new RHL and higher multiplier arrangements.
Regarding National Insurance contributions (NICs), a Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to employer NICs. The TIIN sets out the impact of the policy on the Exchequer, the economic impacts of the policy, and the impacts on individuals, businesses, and civil society organisations, as well as an overview of the equality impacts.
a) The total number of businesses in 2024 is estimated at 5.6 million (see Business population estimates 2024 - GOV.UK, detailed table 2). According to HMRC statistics, there were around 1.3 million business registered for VAT with turnover above the threshold in 2023-34 (see Value Added Tax (VAT) annual statistics - GOV.UK, Table T5). Thus the number of businesses with turnover below the threshold would be approximately the remainder of the 5.6 million, or 4.3 million. It should be noted that some businesses with turnover below the threshold are voluntarily registered for VAT; there were around 0.9 million such businesses in 2023-24.
b) No estimate has been made of the number of small businesses operating below the VAT registration threshold at the constituency level. Any estimate would be above cost grounds.
The UK government is introducing a carbon border adjustment mechanism (CBAM) to address the risk of carbon leakage, which occurs when production and associated emissions shift from one country to another due to different levels of decarbonisation effort (for example through carbon pricing and climate regulation).
The UK CBAM will place a charge on the carbon emissions embodied in certain highly traded, carbon intensive goods imported to the UK from the aluminium, cement, fertiliser, hydrogen and iron & steel sectors. By placing a carbon price on imported goods, the UK aims to ensure that these goods face a carbon price that is comparable to that which the goods would have faced, if they had been produced in the UK.
Therefore, the UK CBAM will ensure highly traded, carbon intensive products from overseas face a comparable carbon price to those produced here so that UK decarbonisation efforts lead to a true reduction in global emissions rather than simply displacing carbon emissions overseas.