Question to the HM Treasury:

To ask His Majesty's Government what plans they have to review the Barnett formula.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Barnett formula is a key part of the arrangements for pooling and sharing risks and resources across the UK. It is simple, efficient and provides a clear and certain outcome, which is why it has stood the test of time.

There are currently no plans to modify the operation of the Barnett formula.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of the introduction of a cap of £25,000 on the amount of VAT that can be claimed back under the Listed Places of Worship Grant Scheme.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government recognises the importance of supporting churches and other listed places of worship. That is why the decision was made to extend the Listed Places of Worship Grant Scheme until 31 March 2026, with a budget of £23m.

Against a tough fiscal picture, the difficult decision was taken by the Department for Culture, Media and Sport (DCMS) to implement an annual limit of £25,000 per individual place of worship for the coming year. The changes to the scheme were necessary given the significant pressures on other parts of the heritage and cultural sectors.

Based on DCMS’s analysis of previous data, 94% of applications will be unaffected by the change, as most claims are under £5,000.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made an assessment of trends in the level of tax (a) evasion and (b) avoidance linked to candy retail stores.

Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)

As my rt. hon Friend the Prime Minister said, the Government recently launched a major crackdown against criminals using high street businesses to launder money at almost 400 properties, which involved securing freezing orders over bank accounts totaling more than £1 million and arresting 35 individuals.

HMRC is leading a cross-Government risk assessment to establish a shared understanding of the key risks and their underlying drivers. The findings of this assessment will inform a revitalised and more ambitious coordinated cross-government approach to addressing the harms associated with these retail models.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the extent to which the Prime Minister's "Budget Board" will be able to improve economic coordination ahead of the November budget.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

At the Budget later this year, the Government will focus on building an economy that works for working people using investment and reform as our tools for renewal. The Government does not routinely comment on internal processes and meetings, including those in advance of fiscal events.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will place in the Library a copy of the presentation materials for the Guilt of Being British seminar given by her Department's race network.

Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)

HMRC is focused on its three priorities as set by the government: improving day-to-day performance and the customer experience, closing the tax gap, and reforming and modernising the tax and customs system.

The question refers to a planned departmental staff network event which we can confirm was cancelled. Therefore, no materials will be placed in the Library.

The Cabinet Office recently published its Staff Network guidance on 23 September and HMRC’s Staff Networks will adhere to this.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of abolishing 5-per-cent value added tax on domestic energy bills, in particular on the cost of living for households.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government is supporting households with energy bills now whilst we transition to clean power by 2030. Gas and electricity are subject to a reduced rate of VAT at five per cent, rather than the standard 20 per cent.

Question to the HM Treasury:

To ask His Majesty's Government when they plan to publish detailed guidance about the interpretation of digital exclusion in the context of Making Tax Digital.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

A significant majority of self-employed individuals and landlords have turnover below the VAT threshold, which is currently £90,000. Since 2022, all VAT-registered businesses have been required to use Making Tax Digital (MTD) regardless of whether they are above of below the VAT threshold. The MTD for Income Tax threshold starts at £50,000 from April 2026, reducing to £30,000 in April 2027 and £20,000 in April 2028. This ensures MTD will extend the benefits of digitalisation to many more businesses, helping them to adopt new digital ways of working, improve productivity and growth and get their tax right. This helps address the tax gap for Income Tax Self-Assessment, which is estimated at £8.7bn in 2023-24 and is particularly prevalent amongst the smallest businesses. HMRC has worked extensively with customers, representative bodies and software developers to ensure that MTD works well for businesses of all sizes.

MTD Quarterly updates are not self-assessment tax returns. They are simple summaries of income and expenditure which can be automatically populated through digital records kept by MTD users. HMRC expects quarterly updates to be accurate based on the best available information at the time, but taxpayers do not have to make a declaration of accuracy when these are submitted, and there will not be penalties for inaccurate quarterly updates.

The Government recognises that not everyone is able to interact with HMRC digitally. Taxpayers who are digitally excluded from MTD for Income Tax will be able to apply for an exemption. HMRC will begin operating the exemption process in the coming weeks.

HMRC will publish detailed guidance when the exemption application process opens for digitally excluded taxpayers. This will explain how taxpayers, or someone acting on their behalf, can apply to be exempted from MTD for Income Tax. HMRC will also write to taxpayers to make them aware of the exemptions. There will also be engagement with business and taxpayer representatives to help disseminate this information.

Question to the HM Treasury:

To ask His Majesty's Government whether they plan to reduce value added tax for hospitality and night-time venues to boost recovery, encourage investment and support long-term growth.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government recognises the significant contribution made by hospitality businesses to economic growth and social life in the UK.

VAT is the UK’s third largest tax, forecast to raise £180 billion in 2025/26. Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer.

HMRC estimate that the cost of a 5 per cent reduced rate for accommodation, hospitality and tourist attractions would be around £13 billion this financial year. If the scope were also to include alcoholic beverages, the cost would be approximately £3 billion greater.

The Government keeps all taxes under review, and the Chancellor makes decisions on tax changes at the Budget, in the context of the overall public finances.

Question to the HM Treasury:

To ask His Majesty's Government whether they plan to issue fines and penalties for inaccurate quarterly Making Tax Digital returns.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

A significant majority of self-employed individuals and landlords have turnover below the VAT threshold, which is currently £90,000. Since 2022, all VAT-registered businesses have been required to use Making Tax Digital (MTD) regardless of whether they are above of below the VAT threshold. The MTD for Income Tax threshold starts at £50,000 from April 2026, reducing to £30,000 in April 2027 and £20,000 in April 2028. This ensures MTD will extend the benefits of digitalisation to many more businesses, helping them to adopt new digital ways of working, improve productivity and growth and get their tax right. This helps address the tax gap for Income Tax Self-Assessment, which is estimated at £8.7bn in 2023-24 and is particularly prevalent amongst the smallest businesses. HMRC has worked extensively with customers, representative bodies and software developers to ensure that MTD works well for businesses of all sizes.

MTD Quarterly updates are not self-assessment tax returns. They are simple summaries of income and expenditure which can be automatically populated through digital records kept by MTD users. HMRC expects quarterly updates to be accurate based on the best available information at the time, but taxpayers do not have to make a declaration of accuracy when these are submitted, and there will not be penalties for inaccurate quarterly updates.

The Government recognises that not everyone is able to interact with HMRC digitally. Taxpayers who are digitally excluded from MTD for Income Tax will be able to apply for an exemption. HMRC will begin operating the exemption process in the coming weeks.

HMRC will publish detailed guidance when the exemption application process opens for digitally excluded taxpayers. This will explain how taxpayers, or someone acting on their behalf, can apply to be exempted from MTD for Income Tax. HMRC will also write to taxpayers to make them aware of the exemptions. There will also be engagement with business and taxpayer representatives to help disseminate this information.

Question to the HM Treasury:

To ask His Majesty's Government why the Making Tax Digital income threshold is different to the value added tax threshold.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

A significant majority of self-employed individuals and landlords have turnover below the VAT threshold, which is currently £90,000. Since 2022, all VAT-registered businesses have been required to use Making Tax Digital (MTD) regardless of whether they are above of below the VAT threshold. The MTD for Income Tax threshold starts at £50,000 from April 2026, reducing to £30,000 in April 2027 and £20,000 in April 2028. This ensures MTD will extend the benefits of digitalisation to many more businesses, helping them to adopt new digital ways of working, improve productivity and growth and get their tax right. This helps address the tax gap for Income Tax Self-Assessment, which is estimated at £8.7bn in 2023-24 and is particularly prevalent amongst the smallest businesses. HMRC has worked extensively with customers, representative bodies and software developers to ensure that MTD works well for businesses of all sizes.

MTD Quarterly updates are not self-assessment tax returns. They are simple summaries of income and expenditure which can be automatically populated through digital records kept by MTD users. HMRC expects quarterly updates to be accurate based on the best available information at the time, but taxpayers do not have to make a declaration of accuracy when these are submitted, and there will not be penalties for inaccurate quarterly updates.

The Government recognises that not everyone is able to interact with HMRC digitally. Taxpayers who are digitally excluded from MTD for Income Tax will be able to apply for an exemption. HMRC will begin operating the exemption process in the coming weeks.

HMRC will publish detailed guidance when the exemption application process opens for digitally excluded taxpayers. This will explain how taxpayers, or someone acting on their behalf, can apply to be exempted from MTD for Income Tax. HMRC will also write to taxpayers to make them aware of the exemptions. There will also be engagement with business and taxpayer representatives to help disseminate this information.

Question to the HM Treasury:

To ask His Majesty's Government whether digitally excluded taxpayers will be able to apply for an exemption from Making Tax Digital before April 2026.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

A significant majority of self-employed individuals and landlords have turnover below the VAT threshold, which is currently £90,000. Since 2022, all VAT-registered businesses have been required to use Making Tax Digital (MTD) regardless of whether they are above of below the VAT threshold. The MTD for Income Tax threshold starts at £50,000 from April 2026, reducing to £30,000 in April 2027 and £20,000 in April 2028. This ensures MTD will extend the benefits of digitalisation to many more businesses, helping them to adopt new digital ways of working, improve productivity and growth and get their tax right. This helps address the tax gap for Income Tax Self-Assessment, which is estimated at £8.7bn in 2023-24 and is particularly prevalent amongst the smallest businesses. HMRC has worked extensively with customers, representative bodies and software developers to ensure that MTD works well for businesses of all sizes.

MTD Quarterly updates are not self-assessment tax returns. They are simple summaries of income and expenditure which can be automatically populated through digital records kept by MTD users. HMRC expects quarterly updates to be accurate based on the best available information at the time, but taxpayers do not have to make a declaration of accuracy when these are submitted, and there will not be penalties for inaccurate quarterly updates.

The Government recognises that not everyone is able to interact with HMRC digitally. Taxpayers who are digitally excluded from MTD for Income Tax will be able to apply for an exemption. HMRC will begin operating the exemption process in the coming weeks.

HMRC will publish detailed guidance when the exemption application process opens for digitally excluded taxpayers. This will explain how taxpayers, or someone acting on their behalf, can apply to be exempted from MTD for Income Tax. HMRC will also write to taxpayers to make them aware of the exemptions. There will also be engagement with business and taxpayer representatives to help disseminate this information.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of the Smarter Regulatory Framework, in particular the impact of the repeal of retained EU law under the Financial Services and Markets Act 2023, on promoting sustainable economic growth and the international competitiveness of the UK’s financial services sector.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

As of the most recent update in July 2025, HM Treasury has repealed, amended, or replaced 51% of assimilated law it is responsible for, as set out in the Retained EU law and Assimilated Law Dashboard. The great majority of this is financial services legislation.

In the last 12 months, HM Treasury has made SIs to replace the EU’s Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and the EU’s Short Selling Regulation.

Sustainable economic growth is a priority of the government. That is why the Financial Services Growth and Competitiveness Strategy, published on 15 July 2025, sets out the government’s approach to delivering a regulatory environment for financial services that is proportionate, predictable, and internationally competitive.

The government has sought to deliver this approach in a way that minimises disruption and produces the most streamlined and accessible framework for firms and creates an agile, workable and coherent regime. For example, through the Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025, which make it easier for the FCA to consistently supervise activities and enforce rules that replace key parts of EU law.

The financial services regulators already have significant rule-making powers, and the government worked closely with them in determining its approach to replacing retained EU law, to ensure that regulators are ready to take on additional responsibilities. It is for regulators like the Prudential Regulation Authority, the Financial Policy Committee, as well as the Financial Conduct Authority, to determine their approach to these new responsibilities They are funded via a levy on financial services firms, and it is their responsibility to set their own funding requirements each year, following consultation, to ensure that they are able to carry out their functions.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of transferring detailed responsibilities from retained EU law to the Prudential Regulation Authority and the Financial Policy Committee; and how they intend to ensure coherence and consistency across the UK’s financial regulatory framework.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

As of the most recent update in July 2025, HM Treasury has repealed, amended, or replaced 51% of assimilated law it is responsible for, as set out in the Retained EU law and Assimilated Law Dashboard. The great majority of this is financial services legislation.

In the last 12 months, HM Treasury has made SIs to replace the EU’s Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and the EU’s Short Selling Regulation.

Sustainable economic growth is a priority of the government. That is why the Financial Services Growth and Competitiveness Strategy, published on 15 July 2025, sets out the government’s approach to delivering a regulatory environment for financial services that is proportionate, predictable, and internationally competitive.

The government has sought to deliver this approach in a way that minimises disruption and produces the most streamlined and accessible framework for firms and creates an agile, workable and coherent regime. For example, through the Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025, which make it easier for the FCA to consistently supervise activities and enforce rules that replace key parts of EU law.

The financial services regulators already have significant rule-making powers, and the government worked closely with them in determining its approach to replacing retained EU law, to ensure that regulators are ready to take on additional responsibilities. It is for regulators like the Prudential Regulation Authority, the Financial Policy Committee, as well as the Financial Conduct Authority, to determine their approach to these new responsibilities They are funded via a levy on financial services firms, and it is their responsibility to set their own funding requirements each year, following consultation, to ensure that they are able to carry out their functions.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the capacity and resources available to the Prudential Regulation Authority and the Financial Policy Committee to carry out the additional responsibilities transferred to them under the Smarter Regulatory Framework.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

As of the most recent update in July 2025, HM Treasury has repealed, amended, or replaced 51% of assimilated law it is responsible for, as set out in the Retained EU law and Assimilated Law Dashboard. The great majority of this is financial services legislation.

In the last 12 months, HM Treasury has made SIs to replace the EU’s Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and the EU’s Short Selling Regulation.

Sustainable economic growth is a priority of the government. That is why the Financial Services Growth and Competitiveness Strategy, published on 15 July 2025, sets out the government’s approach to delivering a regulatory environment for financial services that is proportionate, predictable, and internationally competitive.

The government has sought to deliver this approach in a way that minimises disruption and produces the most streamlined and accessible framework for firms and creates an agile, workable and coherent regime. For example, through the Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025, which make it easier for the FCA to consistently supervise activities and enforce rules that replace key parts of EU law.

The financial services regulators already have significant rule-making powers, and the government worked closely with them in determining its approach to replacing retained EU law, to ensure that regulators are ready to take on additional responsibilities. It is for regulators like the Prudential Regulation Authority, the Financial Policy Committee, as well as the Financial Conduct Authority, to determine their approach to these new responsibilities They are funded via a levy on financial services firms, and it is their responsibility to set their own funding requirements each year, following consultation, to ensure that they are able to carry out their functions.

Question to the HM Treasury:

To ask His Majesty's Government what progress they have made in bringing forward statutory instruments under the Financial Services and Markets Act 2023 to replace retained EU law as part of the Smarter Regulatory Framework; and what is the expected timetable for completion of this process.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

As of the most recent update in July 2025, HM Treasury has repealed, amended, or replaced 51% of assimilated law it is responsible for, as set out in the Retained EU law and Assimilated Law Dashboard. The great majority of this is financial services legislation.

In the last 12 months, HM Treasury has made SIs to replace the EU’s Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and the EU’s Short Selling Regulation.

Sustainable economic growth is a priority of the government. That is why the Financial Services Growth and Competitiveness Strategy, published on 15 July 2025, sets out the government’s approach to delivering a regulatory environment for financial services that is proportionate, predictable, and internationally competitive.

The government has sought to deliver this approach in a way that minimises disruption and produces the most streamlined and accessible framework for firms and creates an agile, workable and coherent regime. For example, through the Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025, which make it easier for the FCA to consistently supervise activities and enforce rules that replace key parts of EU law.

The financial services regulators already have significant rule-making powers, and the government worked closely with them in determining its approach to replacing retained EU law, to ensure that regulators are ready to take on additional responsibilities. It is for regulators like the Prudential Regulation Authority, the Financial Policy Committee, as well as the Financial Conduct Authority, to determine their approach to these new responsibilities They are funded via a levy on financial services firms, and it is their responsibility to set their own funding requirements each year, following consultation, to ensure that they are able to carry out their functions.

Question to the HM Treasury:

To ask His Majesty's Government what discussions they have had with the Bank of England regarding slowing the Bank of England's bond-selling plan to help reduce UK government borrowing costs.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Bank of England has operational independence from the government to carry out its statutory responsibilities for monetary policy and financial stability. Monetary policy, including quantitative easing, is the responsibility of the independent Monetary Policy Committee at the Bank of England. 
 
The separation of fiscal and monetary policy is a key feature of the UK’s economic framework, it is in line with international standards and essential for the effective delivery of monetary policy, so the government does not comment on the conduct or effectiveness of monetary policy.

Question to the HM Treasury:

To ask His Majesty's Government what discussions they have had with the Bank of England about suspending its quantitative tightening policy of selling bonds accumulated through quantitative easing, as opposed to allowing maturing debt to expire.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Bank of England has operational independence from the government to carry out its statutory responsibilities for monetary policy and financial stability. Monetary policy, including quantitative easing, is the responsibility of the independent Monetary Policy Committee at the Bank of England.

The separation of fiscal and monetary policy is a key feature of the UK’s economic framework, it is in line with international standards and essential for the effective delivery of monetary policy, so the government does not comment on the conduct or effectiveness of monetary policy.

Since October 2022, HM Treasury has transferred £93.32bn to the Bank of England to cover losses arising from the indemnity of the Asset Purchase Facility, the vehicle used to implement quantitative easing. This covers losses incurred from net interest costs and the sale and redemption of bonds as the portfolio is unwound. Since 2013, the Bank of England has transferred £123.85bn to HM Treasury, giving HM Treasury a net position of £30.53bn to date

Data on these cash transfers between HM Treasury and the Bank of England are made publicly available by the Office for National Statistics (ONS) in its monthly Public Sector Finances publication. The data are available in the ONS data series ID MF7A in worksheet PSA9B.

Question to the HM Treasury:

To ask His Majesty's Government what losses have been sustained by the Treasury since 2022 as a result of the Bank of England's decision to sell bonds as part of its policy of quantitative tightening.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Bank of England has operational independence from the government to carry out its statutory responsibilities for monetary policy and financial stability. Monetary policy, including quantitative easing, is the responsibility of the independent Monetary Policy Committee at the Bank of England.

The separation of fiscal and monetary policy is a key feature of the UK’s economic framework, it is in line with international standards and essential for the effective delivery of monetary policy, so the government does not comment on the conduct or effectiveness of monetary policy.

Since October 2022, HM Treasury has transferred £93.32bn to the Bank of England to cover losses arising from the indemnity of the Asset Purchase Facility, the vehicle used to implement quantitative easing. This covers losses incurred from net interest costs and the sale and redemption of bonds as the portfolio is unwound. Since 2013, the Bank of England has transferred £123.85bn to HM Treasury, giving HM Treasury a net position of £30.53bn to date

Data on these cash transfers between HM Treasury and the Bank of England are made publicly available by the Office for National Statistics (ONS) in its monthly Public Sector Finances publication. The data are available in the ONS data series ID MF7A in worksheet PSA9B.

Question to the HM Treasury:

To ask His Majesty's Government what discussions they have had with the Bank of England regarding proposals to cap individual holdings of stablecoins at £10,000–£20,000 and £10 million for businesses.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The government recognises that facilitating stablecoin innovation is important for UK competitiveness, and continues to engage with the regulators, including the Bank of England, to ensure a coherent regulatory framework.

The government will bring forward legislation later this year to create a financial services regulatory regime for cryptoassets in the UK, including stablecoins.

Question to the HM Treasury:

To ask His Majesty's Government whether they plan to extend the business rates relief scheme for the night-time economy sector; and what steps they are taking towards business rates reform for that sector.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

To deliver our manifesto pledge, from 2026/27, we intend to introduce permanently lower business rates multipliers for retail, hospitality, and leisure (RHL) properties with rateable values below £500,000, which will include many properties used by the night-time economy sector. This permanent tax cut will ensure that they benefit from much-needed certainty and support.

Ahead of the new multipliers coming into force, we recognise that businesses will need support in 2025/26. As such, we have extended the RHL business rates relief for one year at 40 per cent up to a cash cap of £110,000 per business. Under the previous Government, RHL relief was due to end entirely in April 2025.

Eligibility for the new RHL multipliers is intended to broadly reflect the scope of the existing RHL relief scheme and will be set out in legislation later this year. Eligibility for the RHL relief scheme is set out in guidance published by the Ministry of Housing, Communities & Local Government and includes many night-time economy businesses.

Question to the HM Treasury:

To ask His Majesty's Government how Making Tax Digital will reduce the tax gap attributable to rogue traders who intentionally evade tax.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Quarterly updates required by Making Tax Digital (MTD) are not the same as tax returns. They are simple, unadjusted summaries of income and expenditure, acting as a snapshot of quarterly trading activity. They will be populated automatically through software and can be submitted easily. This process has been designed to be simple for users and quick to complete.

Quarterly updates will support taxpayers to get their tax right by ensuring timely and accurate record keeping, enabling tailored digital prompts and to view estimates of their emerging tax liability throughout the tax year, making it easier to submit their end of year return.

MTD is intended to address parts of the tax gap caused by unintentional taxpayer error and failure to take reasonable care. By preventing common taxpayer errors, MTD for income tax helps address the small business Tax Gap, adding £1.95bn to the public finances through to 2029/30.

Question to the HM Treasury:

To ask His Majesty's Government how increasing filing obligations through Making Tax Digital from one to five filings per year will reduce the tax gap.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Quarterly updates required by Making Tax Digital (MTD) are not the same as tax returns. They are simple, unadjusted summaries of income and expenditure, acting as a snapshot of quarterly trading activity. They will be populated automatically through software and can be submitted easily. This process has been designed to be simple for users and quick to complete.

Quarterly updates will support taxpayers to get their tax right by ensuring timely and accurate record keeping, enabling tailored digital prompts and to view estimates of their emerging tax liability throughout the tax year, making it easier to submit their end of year return.

MTD is intended to address parts of the tax gap caused by unintentional taxpayer error and failure to take reasonable care. By preventing common taxpayer errors, MTD for income tax helps address the small business Tax Gap, adding £1.95bn to the public finances through to 2029/30.

Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to reduce inflation.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Bank of England has the responsibility of controlling inflation, and the Government fully supports them as they take action to return inflation sustainably to 2%. Alongside this, the Government is maintaining stable public finances, reducing borrowing year after year to ease pressure on prices. Borrowing is set to fall by almost a percentage point as a share of GDP this year compared with last, and by a further 0.8ppts next year. The Chancellor has asked departments to prioritise reducing inflation when developing policies for the Autumn Budget, ensuring decisions support stability and long-term growth.

The Government is supporting households with targeted measures to ease pressure on budgets. This includes increasing the Universal Credit Standard Allowance, extending the Household Support Fund with £1 billion a year for crisis support through councils, and expanding Free School Meals to all children with a parent on Universal Credit from 2026. The Warm Home Discount will be expanded to cover around 6 million households.

Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to ensure consumer protection under the Financial Conduct Authority's plans to exempt cryptoasset providers from some traditional financial rules.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government is bringing forward legislation this year that will create a comprehensive financial services regulatory regime for cryptoassets. This regime will mean firms seeking to offer cryptoasset services to UK customers will need to be authorised and regulated by the Financial Conduct Authority. This new regime will build on existing UK protections provided by anti-money laundering regulations and financial promotions rules.

Question to the HM Treasury:

To ask His Majesty's Government whether they will consider reducing National Insurance thresholds for employers.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government has taken a number of difficult but necessary decisions on tax, welfare, and spending to fix the public finances, fund public services, and restore economic stability after the situation we inherited from the previous government.

One of the toughest decisions we made was to raise the rate of employer National Insurance Contributions (NICs) from 13.8% to 15%, whilst reducing the per-employee threshold at which employers start to pay National Insurance (the Secondary Threshold) from £9,100 to £5,000.

The Government recognises the need to protect the smallest businesses and charities, which is why we have more than doubled the Employment Allowance to £10,500, meaning more than half of businesses with NICs liabilities either gain or see no change this year.

Question to the HM Treasury:

To ask His Majesty's Government how many individuals were involved in testing Making Tax Digital during the pilot in 2024–25, and how many tax returns they expect to be filed by April 2026.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Taxpayers within Making Tax Digital (MTD) for Income Tax will have one month from the end of each update period to submit their quarterly update. These updates are not the same as tax returns. They are simple, unadjusted summaries of income and expenditure, acting as a snapshot of quarterly trading activity. They will be populated automatically through software and can be submitted easily. This process has been designed to be simple for users and quick to complete.

Although MTD for Income Tax introduces changes to the reporting ofincome and expenditure with quarterly updates, it does not change the frequency or timing of tax payments.

HM Revenue & Customs (HMRC) has published a suite of guidance including interactive guidance to help taxpayers understand if and when they need to use MTD for Income Tax. This will be supplemented by help provided through a taxpayer’s agent or software provider. HMRC is engaging taxpayers affected by the changes directly and through webinars, industry engagement and marketing activity.

HMRC has published guidance about software on its newly revised Software Choices pages, making it easier for taxpayers to choose the rightsoftware for both their budget and their needs. Free and low-cost software options are already listed. Further products will be added to these pages as they become available. Where a taxpayer needs to change software during the tax year, they will need to import their digital records into the new compatible software. HMRC’s Minimum Functionality Standards for MTD software requires developers to build functionality into their products to enable users to export their data.

The 2024/25 Private Beta testing phase of MTD for Income Tax runs to31 January 2026. 226 individuals signed up for the testing. This enabled HMRC to test a range of core user journeys, identify issues and implement improvements. Currently, there are around 3,500 taxpayers signed up for the public testing phase of MTD for Income Tax in the 2025/26 tax year.

Under the requirements specified in HMRC’s Minimum Functionality Standards for Making Tax Digital (MTD) software, using software that is compatible with MTD for Income Tax should enable users to completethe entirety of their obligations within Income Tax Self-Assessment.

Question to the HM Treasury:

To ask His Majesty's Government what support, if any, will be available to taxpayers who are denied exemption from Making Tax Digital but who struggle to comply or be ready in time.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Taxpayers within Making Tax Digital (MTD) for Income Tax will have one month from the end of each update period to submit their quarterly update. These updates are not the same as tax returns. They are simple, unadjusted summaries of income and expenditure, acting as a snapshot of quarterly trading activity. They will be populated automatically through software and can be submitted easily. This process has been designed to be simple for users and quick to complete.

Although MTD for Income Tax introduces changes to the reporting ofincome and expenditure with quarterly updates, it does not change the frequency or timing of tax payments.

HM Revenue & Customs (HMRC) has published a suite of guidance including interactive guidance to help taxpayers understand if and when they need to use MTD for Income Tax. This will be supplemented by help provided through a taxpayer’s agent or software provider. HMRC is engaging taxpayers affected by the changes directly and through webinars, industry engagement and marketing activity.

HMRC has published guidance about software on its newly revised Software Choices pages, making it easier for taxpayers to choose the rightsoftware for both their budget and their needs. Free and low-cost software options are already listed. Further products will be added to these pages as they become available. Where a taxpayer needs to change software during the tax year, they will need to import their digital records into the new compatible software. HMRC’s Minimum Functionality Standards for MTD software requires developers to build functionality into their products to enable users to export their data.

The 2024/25 Private Beta testing phase of MTD for Income Tax runs to31 January 2026. 226 individuals signed up for the testing. This enabled HMRC to test a range of core user journeys, identify issues and implement improvements. Currently, there are around 3,500 taxpayers signed up for the public testing phase of MTD for Income Tax in the 2025/26 tax year.

Under the requirements specified in HMRC’s Minimum Functionality Standards for Making Tax Digital (MTD) software, using software that is compatible with MTD for Income Tax should enable users to completethe entirety of their obligations within Income Tax Self-Assessment.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the minimum functionality standards for Making Tax Digital software, and whether that software will be capable of filing (1) quarterly updates, and (2) tax returns.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Taxpayers within Making Tax Digital (MTD) for Income Tax will have one month from the end of each update period to submit their quarterly update. These updates are not the same as tax returns. They are simple, unadjusted summaries of income and expenditure, acting as a snapshot of quarterly trading activity. They will be populated automatically through software and can be submitted easily. This process has been designed to be simple for users and quick to complete.

Although MTD for Income Tax introduces changes to the reporting ofincome and expenditure with quarterly updates, it does not change the frequency or timing of tax payments.

HM Revenue & Customs (HMRC) has published a suite of guidance including interactive guidance to help taxpayers understand if and when they need to use MTD for Income Tax. This will be supplemented by help provided through a taxpayer’s agent or software provider. HMRC is engaging taxpayers affected by the changes directly and through webinars, industry engagement and marketing activity.

HMRC has published guidance about software on its newly revised Software Choices pages, making it easier for taxpayers to choose the rightsoftware for both their budget and their needs. Free and low-cost software options are already listed. Further products will be added to these pages as they become available. Where a taxpayer needs to change software during the tax year, they will need to import their digital records into the new compatible software. HMRC’s Minimum Functionality Standards for MTD software requires developers to build functionality into their products to enable users to export their data.

The 2024/25 Private Beta testing phase of MTD for Income Tax runs to31 January 2026. 226 individuals signed up for the testing. This enabled HMRC to test a range of core user journeys, identify issues and implement improvements. Currently, there are around 3,500 taxpayers signed up for the public testing phase of MTD for Income Tax in the 2025/26 tax year.

Under the requirements specified in HMRC’s Minimum Functionality Standards for Making Tax Digital (MTD) software, using software that is compatible with MTD for Income Tax should enable users to completethe entirety of their obligations within Income Tax Self-Assessment.

Question to the HM Treasury:

To ask His Majesty's Government whether they have plans for taxpayers to pay income tax on a quarterly basis in line with quarterly submissions of Making Tax Digital returns.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Taxpayers within Making Tax Digital (MTD) for Income Tax will have one month from the end of each update period to submit their quarterly update. These updates are not the same as tax returns. They are simple, unadjusted summaries of income and expenditure, acting as a snapshot of quarterly trading activity. They will be populated automatically through software and can be submitted easily. This process has been designed to be simple for users and quick to complete.

Although MTD for Income Tax introduces changes to the reporting ofincome and expenditure with quarterly updates, it does not change the frequency or timing of tax payments.

HM Revenue & Customs (HMRC) has published a suite of guidance including interactive guidance to help taxpayers understand if and when they need to use MTD for Income Tax. This will be supplemented by help provided through a taxpayer’s agent or software provider. HMRC is engaging taxpayers affected by the changes directly and through webinars, industry engagement and marketing activity.

HMRC has published guidance about software on its newly revised Software Choices pages, making it easier for taxpayers to choose the rightsoftware for both their budget and their needs. Free and low-cost software options are already listed. Further products will be added to these pages as they become available. Where a taxpayer needs to change software during the tax year, they will need to import their digital records into the new compatible software. HMRC’s Minimum Functionality Standards for MTD software requires developers to build functionality into their products to enable users to export their data.

The 2024/25 Private Beta testing phase of MTD for Income Tax runs to31 January 2026. 226 individuals signed up for the testing. This enabled HMRC to test a range of core user journeys, identify issues and implement improvements. Currently, there are around 3,500 taxpayers signed up for the public testing phase of MTD for Income Tax in the 2025/26 tax year.

Under the requirements specified in HMRC’s Minimum Functionality Standards for Making Tax Digital (MTD) software, using software that is compatible with MTD for Income Tax should enable users to completethe entirety of their obligations within Income Tax Self-Assessment.

Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to ensure that support will be provided to taxpayers who (1) are unsure how Making Tax Digital software can best support their needs, and (2) are unable to file their tax return using the software they have selected as a result of a change in their circumstances.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Taxpayers within Making Tax Digital (MTD) for Income Tax will have one month from the end of each update period to submit their quarterly update. These updates are not the same as tax returns. They are simple, unadjusted summaries of income and expenditure, acting as a snapshot of quarterly trading activity. They will be populated automatically through software and can be submitted easily. This process has been designed to be simple for users and quick to complete.

Although MTD for Income Tax introduces changes to the reporting ofincome and expenditure with quarterly updates, it does not change the frequency or timing of tax payments.

HM Revenue & Customs (HMRC) has published a suite of guidance including interactive guidance to help taxpayers understand if and when they need to use MTD for Income Tax. This will be supplemented by help provided through a taxpayer’s agent or software provider. HMRC is engaging taxpayers affected by the changes directly and through webinars, industry engagement and marketing activity.

HMRC has published guidance about software on its newly revised Software Choices pages, making it easier for taxpayers to choose the rightsoftware for both their budget and their needs. Free and low-cost software options are already listed. Further products will be added to these pages as they become available. Where a taxpayer needs to change software during the tax year, they will need to import their digital records into the new compatible software. HMRC’s Minimum Functionality Standards for MTD software requires developers to build functionality into their products to enable users to export their data.

The 2024/25 Private Beta testing phase of MTD for Income Tax runs to31 January 2026. 226 individuals signed up for the testing. This enabled HMRC to test a range of core user journeys, identify issues and implement improvements. Currently, there are around 3,500 taxpayers signed up for the public testing phase of MTD for Income Tax in the 2025/26 tax year.

Under the requirements specified in HMRC’s Minimum Functionality Standards for Making Tax Digital (MTD) software, using software that is compatible with MTD for Income Tax should enable users to completethe entirety of their obligations within Income Tax Self-Assessment.

Question to the HM Treasury:

To ask His Majesty's Government what is the estimated annual cost of the age-related exemption to the payment of National Insurance contributions.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

HM Revenue and Customs (HMRC) publishes the estimated annual cost of exempting individuals over State Pension age from paying National Insurance contributions (NICs) in the National Insurance contributions tab of the Structural Tax Reliefs publication. The estimated annual costs for employer NICs relief for apprentices under 25 and employees under 21 are published by HMRC in the NICs tab of the Non-Structural Tax Reliefs publication. These publications are both available online.

The figures for these three exemptions/reliefs are shown below:

Note 1: Figures shown are in £ million.

Note 2: Figures marked with an asterisk (*) are provisional

Question to the HM Treasury:

To ask His Majesty's Government what plans they have to review the age-related exemption for National Insurance contributions.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Employees and the self-employed make contributions that determine their level of State Pension until State Pension age. Payment of National Insurance contributions (NICs) builds an individual’s entitlement to claim contributory benefits which then replace earnings in certain circumstances, for example if someone is unable to work or is retired. After reaching State Pension age, the liability for employee and self-employed NICs no longer exists.

Employers are able to claim employer NICs reliefs including those for under-21s and under-25 apprentices. This means employers pay no employer NICs for apprentices under 25 or employees under 21 whose annual salaries are below £50,270.

The Government keeps all taxes under review as part of the policy making process.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the practicalities of the December quarterly Making Tax Digital return deadline of 7 February being close to the annual personal tax return deadline.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Taxpayers within Making Tax Digital (MTD) for Income Tax will have one month from the end of each update period to submit their quarterly update. These updates are not the same as tax returns. They are simple, unadjusted summaries of income and expenditure, acting as a snapshot of quarterly trading activity. They will be populated automatically through software and can be submitted easily. This process has been designed to be simple for users and quick to complete.

Although MTD for Income Tax introduces changes to the reporting ofincome and expenditure with quarterly updates, it does not change the frequency or timing of tax payments.

HM Revenue & Customs (HMRC) has published a suite of guidance including interactive guidance to help taxpayers understand if and when they need to use MTD for Income Tax. This will be supplemented by help provided through a taxpayer’s agent or software provider. HMRC is engaging taxpayers affected by the changes directly and through webinars, industry engagement and marketing activity.

HMRC has published guidance about software on its newly revised Software Choices pages, making it easier for taxpayers to choose the rightsoftware for both their budget and their needs. Free and low-cost software options are already listed. Further products will be added to these pages as they become available. Where a taxpayer needs to change software during the tax year, they will need to import their digital records into the new compatible software. HMRC’s Minimum Functionality Standards for MTD software requires developers to build functionality into their products to enable users to export their data.

The 2024/25 Private Beta testing phase of MTD for Income Tax runs to31 January 2026. 226 individuals signed up for the testing. This enabled HMRC to test a range of core user journeys, identify issues and implement improvements. Currently, there are around 3,500 taxpayers signed up for the public testing phase of MTD for Income Tax in the 2025/26 tax year.

Under the requirements specified in HMRC’s Minimum Functionality Standards for Making Tax Digital (MTD) software, using software that is compatible with MTD for Income Tax should enable users to completethe entirety of their obligations within Income Tax Self-Assessment.

Abolish income tax and replace it with a mandatory annual payment to the Government that all UK residents must pay, regardless of their income, financial situation, etc. The payment will be the same for everyone.

We believe inheritance tax destroys family wealth for future generations and destroys opportunities of further investment into the UK. We believe it is inhumane and incredibly unfair. Many people work all their lives to build wealth, only for it to be taxed by the Government.

The Orchestra Tax Relief (OTR) is offered to instrumentalist groups on public musical performances. I think the human voice is a versatile instrument capable of conveying emotion, rhythm, melody and harmony yet doesn't apply as a qualifying instrument for OTR, and this unfair definition must change.

We believe the Government should take urgent action to support workers and improve living standards by implementing this tax cut as soon as possible.

The Chancellor should introduce a Pension Tax Lock: a commitment not to reduce the amount people can withdraw from their pension tax-free or the amount of tax relief given on pension contributions. We believe this would help ensure retirement savings are protected and people can save with confidence

We want the government to introduce a new tax code for state pensioners, set at double the basic threshold. If this was implemented, pensioners would receive a higher tax-exempt limit, but wealthier pensioners would still pay tax.

Reform Section 24 so rental income is taxed on profit, not revenue. We think this would make new-build flats bought under Help to Buy or Shared Ownership more attractive to buyers and investors. We believe this could allow first-time buyers to move on which could ease pressure in the rental market.

Found: on the capacity of further education institutions to provide high-quality, industry-relevant 1 HM Treasury

Question to the Department for Education:

To ask the Secretary of State for Education, what estimate she has made of the potential impact of changes to the VAT status of independent schools on the number of children enrolled in state schools in September 2025.

Answered by Olivia Bailey - Parliamentary Under-Secretary of State (Department for Education) (Equalities)

HM Treasury published a Tax Information and Impact Note on applying VAT to independent school fees, which includes the government’s estimates of the number of pupils expected to enter the state sector as a result of this policy. This is available here: https://www.gov.uk/government/publications/vat-on-private-school-fees/applying-vat-to-private-school-fees#who-is-likely-to-be-affected.

Question to the Department for Education:

To ask the Secretary of State for Education, if she will make an assessment of the potential impact of applying VAT to independent school fees on boys who are neurodiverse.

Answered by Olivia Bailey - Parliamentary Under-Secretary of State (Department for Education) (Equalities)

HM Treasury published a Tax Information and Impact Note (TIIN) on applying VAT to independent school fees. This is a comprehensive assessment of the VAT policy, including impacts on individuals and families, and equalities impacts. The TIIN is available here: https://www.gov.uk/government/publications/vat-on-private-school-fees/applying-vat-to-private-school-fees#who-is-likely-to-be-affected.

We ask Government to establish an Independent Early Years Funding Review Body. Similar to the School Teachers’ Review Body, it could take evidence from providers, parents and experts and recommend fair funding rates based on actual costs, not political decisions, for the Government to respond to.

Found: We believe that for too long, childcare funding rates have been set by HM Treasury and the Department

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Found: and for safeguarding the Commission’s assets, are set out in Managing Public Money published by HM Treasury

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Found: The HMT 10 Year Infrastructure Working Paper published in January is encouraging but the concern is that

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