Asked by: Roz Savage (Liberal Democrat - South Cotswolds)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what comparative assessment she has made of the potential impact of alcohol duty policy on on-trade venues such as pubs, with off-trade alcohol sales in supermarkets.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The importance of the 'on-trade' is recognised in the alcohol duty system via Draught Relief, which ensures eligible products served on draught pay less duty than their packaged equivalents. The Chancellor significantly increased the generosity of this relief at Autumn Budget 2024, taking a penny of duty off a typical strength pint and reducing overall duty receipts by £85m. Draught beer and cider now pay 13.9% less in tax than their packaged equivalents – a 50% increase on the draught discount under the previous government (9.2%).
At Autumn Budget 2025, the Chancellor confirmed that alcohol duty would be uprated on 1 February 2026 to maintain its real-terms value. The government does not expect this to have any significant impact on competition between the on- and off-trades.
An assessment of the impacts of the inflation-linked uprating at the most recent Budget is published within the Tax Impact and Information Note (TIIN) here: https://www.gov.uk/government/publications/alcohol-duty-rates-change/alcohol-duty-uprating#summary-of-impacts.
Asked by: Richard Holden (Conservative - Basildon and Billericay)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department has conducted a comparative assessment of Air Passenger Duty rates in the UK with aviation passenger taxes and equivalent charges in other European countries; and whether such analysis is used to inform decisions on Air Passenger Duty policy.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Air Passenger Duty (APD) applies to airlines, not individual passengers, and is the principal tax on the aviation sector. It is expected to raise £4.7 billion in 2025-26.
The Government is clear that APD is an appropriate tax that ensures airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. Other countries also have different forms of aviation taxes.
Asked by: Neil Duncan-Jordan (Labour - Poole)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she plans to remove VAT from refurbished building work.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
Residential renovations are subject to a reduced rate of VAT of five per cent if they meet certain conditions. These include conversions of buildings from one residential use to another, conversions from commercial to residential use, and the renovation of properties that have been empty for two or more years.
The Chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances.
Asked by: Adam Dance (Liberal Democrat - Yeovil)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to help improve the efficiency of His Majesties Revenue and Customs' operations.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
As published in the Spending Review 2025 Departmental Efficiency Plans, HM Revenue and Customs will be delivering significant efficiencies of £886m per year by 2028-29 in five areas:
Asked by: David Simmonds (Conservative - Ruislip, Northwood and Pinner)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, further to the business rate information letter, 1/2026: Pubs and live music venues relief 2026 to 2027, whether the new relief is subject to a state aid cap for chain pubs; and whether it will apply to venues subject to the high value multiplier.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
From April, every pub and live music venue will get 15% off its new business rates bill on top of the support announced at Budget and then bills will be frozen in real terms for a further two years.
Final costings will be confirmed at a fiscal event in the usual way.
The retail and hospitality sectors will continue to benefit from the £4.3 billion support package announced at Budget. This support package means most properties seeing increases will see them capped at 15% or less next year, or £800 for the smallest.
Asked by: James Cleverly (Conservative - Braintree)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 15 January 2025 to Question 103891 on Business Rates: Tax Allowances, what is the evidential basis for the statement that the temporary Retail, Hospitality and Leisure relief has been winding down since Covid.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Retail, Hospitality and Leisure (RHL) relief on business rates has been reduced over time since 2020/21, when it was set at 100%. In 2021/22, this relief was lowered to 75%, in 2022/23 it was 50%, in 2023/24 and 2024/25 it was 75%, and in 2025/26 the relief was lowered to 40%.
At Budget, the Government announced it was extending the Supporting Small Business Relief scheme to those businesses who are currently receiving RHL Relief. This scheme caps the increases in bills they can face in each of the next 3 years, calculated from a baseline that includes the effect of the RHL relief. This means that many of those currently getting RHL relief will benefit from SSB relief next year.
Asked by: Munira Wilson (Liberal Democrat - Twickenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will take steps to improve accessibility for SMEs to the research and development tax credit system.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government recognises the important role that research and development (R&D) plays in driving innovation and economic growth as well as the benefits it can bring for society.
At Autumn Budget 2024, the Government committed to maintaining the generosity of the rates in both the merged R&D Expenditure Credit (RDEC) scheme and the Enhanced Support for R&D Intensive SMEs (ERIS) scheme. This, combined with the commitment to cap the headline rate of Corporation Tax, means that companies doing qualifying R&D will continue to receive between £15 to £27 for every £100 spent on R&D. Notably, the ERIS scheme will provide around £1.3 billion of relief per year to roughly 20,000 R&D intensive, loss-making SMEs.
The Government is also taking steps to improve the administration of the reliefs, to make it easier and more reliable for legitimate claimants while continuing to protect taxpayer money from unacceptable levels of error and fraud in the system. HMRC is working with the Expert Advisory Panel which will provide it with cutting edge technical expertise to inform policy and operations. HMRC also operates an advance assurances service to help SMEs applying for the tax credits and will pilot an expanded service this spring, enabling more firms to use it.
Asked by: Navendu Mishra (Labour - Stockport)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what the policy justification is for applying interest to instalment payments of Electric Vehicle Excise Duty; and whether her Department considered alternative models for collecting eVED.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
As announced at Budget 2025, the Government is introducing Electric Vehicle Excise Duty (eVED) from April 2028, a new mileage charge for electric and plug-in hybrid cars, recognising that electric vehicles (EVs) contribute to congestion and wear and tear on the roads but pay no equivalent to fuel duty.
The Government considered a number of options for collecting eVED and intends to make complying with the new requirements as simple as possible for motorists. Consistent with their current VED payment choice, motorists will be able to choose between multiple payment options including online and via telephone; and will be able to either pay upfront or split into smaller payments such as via monthly Direct Debit.
The Government will carefully consider the eVED payment regime in the run-up to implementation to ensure it can function most effectively for motorists, and seeks views on eVED implementation as part of the consultation. The consultation is available at GOV.UK: www.gov.uk/government/consultations/consultation-on-the-introduction-of-electric-vehicle-excise-duty-eved.
Asked by: Pippa Heylings (Liberal Democrat - South Cambridgeshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reason repairs and maintenance are treated differently for VAT purposes for (a) places of worship and (b) museums and art galleries.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Construction repair and remedial works to all buildings are charged at the standard rate of VAT, this includes places of worship and museums/art galleries.
Previously major alterations to listed buildings were zero-rated, including places of worship. Since 2012, alteration works to a protected building are standard rated for VAT. Details are set out in HMRC guidance, available on GOV.UK: https://www.gov.uk/guidance/buildings-and-construction-vat-notice-708#section9
Some museums and galleries receive VAT refunds on the costs associated with providing free access to their permanent collections, under the museums and galleries VAT Refund Scheme. More information can be found at VAT Refund Scheme for museums and galleries (VAT Notice 998) - GOV.UK
The Listed Places of Worship Grant Scheme provides grants for VAT paid by listed places of worship on their repair and maintenance costs, with the objective of helping to preserve UK heritage. From April 2026 the scheme will be replaced by a Places of Worship Renewal Fund, which will invest £92 million capital funding into listed places of worship. It is designed to ensure that taxpayer funding is targeted more effectively toward the preservation of our heritage assets.
Asked by: Iain Duncan Smith (Conservative - Chingford and Woodford Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of removing the wear and tear allowance for childminders under Making Tax Digital.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Childminders play a vital role in childcare. The Government has eased rules on working from schools and community centres and increased early years funding rates above 2023 average fees. These increases reflect increased costs, and from April 2026, local authorities must pass at least 97 per cent of funding to providers.
Only a small proportion of childminders with qualifying income over £50,000 will be mandated into Making Tax Digital (MTD) for Income tax from April 2026. Childminders moving to MTD for income tax can continue to claim tax relief for household costs, wear and tear of household items and furniture, and food and drink, by deducting actual business costs. This ensures childminders receive tax relief for all of the costs that they incur in relation to their childminding business.
The Government will monitor the impact of Making Tax Digital (MTD) for income tax on childminders and other home-based childcare providers in the same way as it will for all sole traders moving to MTD for income tax.