Asked by: Shaun Davies (Labour - Telford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will publish a policy to disregard VAT for the construction of budlings for the public benefit and services by charities.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government maintains a zero rate of VAT for the construction of new buildings that will be used solely for a relevant charitable purpose.
Information on the definition of a relevant charitable purpose for the purpose of the zero rate of VAT can be found here: https://www.gov.uk/guidance/buildings-and-construction-vat-notice-708
Asked by: Sam Carling (Labour - North West Cambridgeshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to changes to the inheritance tax treatment of pension pots whether it is her policy that a) the total estate will be taken to include the unused pension pot, and b) donations to charity made from the unused pension pot will be considered as contributing to the 10% minimum.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
At Autumn Budget 2024, the Government announced that unused pension funds and death benefits payable from a pension will form part of a person’s estate for inheritance tax purposes from 6 April 2027.
Where at least 10% of a person’s net estate is left to a qualifying charity, their estate is taxed at a reduced rate of inheritance tax of 36% instead of 40%. When considering this, the pension will fall within the general component of the estate. This component includes the deceased’s free estate and from 6 April 2027 will also include any unused pension funds and death benefits (called notional pension property). Any notional pension property that is paid to a qualifying charity will count toward the charitable giving conditions for the general component Further guidance can be found here: https://www.gov.uk/hmrc-internal-manuals/inheritance-tax- manual/ihtm45003. Guidance will be updated before the changes are implemented in April 2027.
Charity Lump Sum Death Benefits can be paid free of Income Tax. These lump sums are deliberately limited to money purchase arrangements where the deceased member had no dependants. These rules are not changing as this ensures that pension funds are used to support dependants where they exist, while allowing schemes to pay out benefits where there is no other beneficiary.
Asked by: Sam Carling (Labour - North West Cambridgeshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential merits of amending the definition of a charitable lump sum death benefit so that people with dependents do not face barriers to donating to charity from their pension.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
At Autumn Budget 2024, the Government announced that unused pension funds and death benefits payable from a pension will form part of a person’s estate for inheritance tax purposes from 6 April 2027.
Where at least 10% of a person’s net estate is left to a qualifying charity, their estate is taxed at a reduced rate of inheritance tax of 36% instead of 40%. When considering this, the pension will fall within the general component of the estate. This component includes the deceased’s free estate and from 6 April 2027 will also include any unused pension funds and death benefits (called notional pension property). Any notional pension property that is paid to a qualifying charity will count toward the charitable giving conditions for the general component Further guidance can be found here: https://www.gov.uk/hmrc-internal-manuals/inheritance-tax- manual/ihtm45003. Guidance will be updated before the changes are implemented in April 2027.
Charity Lump Sum Death Benefits can be paid free of Income Tax. These lump sums are deliberately limited to money purchase arrangements where the deceased member had no dependants. These rules are not changing as this ensures that pension funds are used to support dependants where they exist, while allowing schemes to pay out benefits where there is no other beneficiary.
Asked by: James Cartlidge (Conservative - South Suffolk)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps her Department is taking to support farmers who have been affected by the increase in the price of red Diesel in South Suffolk.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Farmers retained the entitlement to use red diesel for agricultural machinery after it was withdrawn from most sectors in 2022. In contrast to full duty diesel, taxed at 52.95p per litre, red diesel currently incurs a duty of 10.18p per litre.
At Budget 2025, the Government extended the temporary 5p fuel duty cut alongside extending the proportionate percentage cut for rebated fuels, which includes red diesel. This maintains the red diesel rate at the levels set in March 2022 at 10.18p per litre until the end of August 2026, with rates then gradually returning to March 2022 levels by March 2027, an increase of less than 1p a litre. The planned inflation increase for 2026-27 has also been cancelled.
Asked by: Richard Holden (Conservative - Basildon and Billericay)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what is the current revenue to the Exchequer of VAT from pilot training; and what would the estimated net cost to the Exchequer be of removing VAT from pilot training.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
HMRC does not hold information on the VAT revenue from pilot training.
This is because businesses are not required to provide a breakdown by product or service on their VAT returns, as this would impose an excessive administrative burden.
I refer the Honourable Member to my answer of 21 January 2026 (UIN 105280) stating that the Government has no plans to change policy in this area.
Asked by: Scott Arthur (Labour - Edinburgh South West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make it her policy to bring in (a) relief and (b) reduction in Vehicle Excise Duty rates for UK-manufactured battery electric vehicles.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Vehicle Excise Duty (VED) is a tax on vehicles used or kept on public roads. As announced by the previous Government at Autumn Statement 2022, from April 2025, zero emission and hybrid cars, vans and motorcycles now pay VED in a similar way to petrol and diesel vehicles. Revenue from motoring taxes helps ensure we can continue to fund the vital public services and infrastructure that people and families across the UK expect.
The Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy. The Chancellor makes decisions on tax policy at fiscal events in the context of the public finances.
Asked by: Pippa Heylings (Liberal Democrat - South Cambridgeshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the differential treatment of electric and internal combustion engine motorcycles under the proposed electric Vehicle Excise Duty framework; and whether she has considered extending any VED exemptions to all motorcycles on the basis of their road surface impact.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The government will implement electric Vehicle Excise Duty (eVED) as an additional mileage based add-on to Vehicle Excise Duty (VED) for electric and plug-in hybrid cars, which is designed to replace the fuel duty revenues which will be lost as petrol and diesel vehicles are phased out over time.
Other vehicle types, such as vans, buses, HGVs and motorcycles will not be in scope of eVED upon its introduction in April 2028. At this stage, the transition to electric for these other vehicle types is less advanced than for cars.
Under VED, different rates apply to cars, vans, and motorcycles, and the rate for each vehicle is calculated according to a range of factors, such as its date of first registration, weight, or CO2 emissions. There are no plans to extend VED exemptions to motorcycles based on their road surface impact.
Asked by: Yasmin Qureshi (Labour - Bolton South and Walkden)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the Office for Budget Responsibility provided estimates between March 2016 and April 2028 on the potential impact that the proposed Soft Drinks Industry Levy would have on the Consumer Price Index (CPI); and what estimate her Department has made of the potential impact of that policy on the CPI in the 2018-19 financial year.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Forecasting the economy, including the impact of Government policy decisions on inflation, is the responsibility of the independent Office for Budget Responsibility (OBR).
The OBR set out its latest assessment of policy measures in its Spring Forecast 2026, published on 3 March 2026. The OBR did not publish a specific estimate of the impact of the Soft Drinks Industry Levy on inflation in that forecast, or in previous Economic and Fiscal Outlook publications since the levy was announced in 2016, which would include the impact for the 2018-19 financial year.
Asked by: Daisy Cooper (Liberal Democrat - St Albans)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 12 March to Question 118384 on Hybrid Vehicles: Excise Duties, whether she has considered the potential merits of allowing those PHEV drivers who (a) opt in to doing so and (b) have vehicles with the technical means to record miles driven in electric or petrol mode, to submit accurate returns to allow eVED to be paid only on those miles not already subject to fuel duty.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
As announced at Budget 2025, plug-in hybrid vehicles (PHEVs) will be subject to a reduced electric Vehicle Excise Duty rate of 1.5 pence per mile upon its introduction in April 2028 – half the rate that will apply to fully electric cars. This approach recognises that PHEVs have the capacity to drive in either electric or petrol mode and strikes the right balance between fairness, protecting motorists’ privacy and minimising administrative burdens on motorists.
The government recognises that the large majority of EVs and PHEVs have in-built vehicle telematics, which monitor various driving activities and are viewable by drivers, vehicle manufacturers, or permitted third parties in some cases.
The government will not mandate use of these telematics for administering eVED; however, it welcomed views in the consultation on how various types of technologies could be used on an opt-in basis in future to simplify the system and reduce administrative burdens on motorists and businesses.
The consultation closed on 18 March 2026. The Government will publish a response in due course.
Asked by: John Hayes (Conservative - South Holland and The Deepings)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department has used artificial intelligence to assist with drafting (a) legislation and (b) policy in the past 12 months.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
AI is not used by the department to draft legislation.
Officials use AI tools in combination with a range of evidence, collaboration, challenge and technology to deliver policy drafts. They use their judgement and a variety of data sources to apply a critical lens to their advice and analysis to ensure high quality.
Officials use HMT-GPT, the department’s internal AI tool, and Copilot, which are both secure and quality assured for civil service use. Guidance and training for responsible AI usage is provided to staff, making it clear that tools are designed to assist with work, not to replace colleagues in decision making processes.