Asked by: Lord Kempsell (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government to what extent the rise in employers' National Insurance contributions contributed to the loss of 69,000 hospitality jobs since last October, according to figures from the Office for National Statistics, and how this compares with their initial estimates of sector specific job losses before implementing the rise.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
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 Government protected the smallest businesses from the changes to employer NICs 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.
Asked by: Lord Kempsell (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what changes were made to the guidance Managing Public Money in the June 2025 version compared to the May 2023 version.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
As set out in the Dear Accounting Officer letter DAO 02/25, the 2025 edition of Managing Public Money includes the following revisions and additions.
Asked by: Lord Kempsell (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what steps they are taking to mitigate any impact of placing VAT on private schools on swimming lessons run by swim schools using private schools’ premises; and what plans they have to exempt swimming lessons from VAT.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government has conducted careful and thorough analysis of the impacts of placing VAT on private schools, and the Government's costings have been scrutinised by the independent Office for Budget Responsibility. The Government published a detailed costing note and Tax Impact and Information Note (TIIN) on 30 October 2024.
To support access to swimming lessons, the Government already exempts them from VAT when they are supplied by an eligible non-profit-making body. This includes lessons provided by eligible bodies using premises owned by private schools.
Asked by: Lord Kempsell (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they will exempt students in receipt of Music and Dance Scheme grants from paying VAT on independent school fees.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Since 1 January 2025, all education services and vocational training provided by private schools in the UK for a charge have been subject to VAT at the standard rate of 20 per cent. This also applies to fees paid by students in receipt of the Music and Dance Scheme grants.
This is to ensure fairness and consistency across all schools that provide education services and vocational training for a charge.
However, the Department for Education has decided to adjust its Music and Dance Scheme bursary contribution for families with a relevant income below £45,000 to account for the VAT that will be applied on fees, ensuring that the total parental fee contributions for families with below average relevant incomes remain unchanged for the rest of the 2024/25 academic year.
Asked by: Lord Kempsell (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what consultation process they undertook before announcing the recent reforms to agricultural property relief and business property relief for inheritance tax.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government takes into account all representations made ahead of the Budget, and meets with stakeholders on a regular basis.
The Government published information about the reforms to agricultural property relief and business property relief at www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms.
Almost three-quarters of estates claiming agricultural property relief (or those claiming agricultural property relief and business property relief together) each year are expected to be unaffected by these reforms.
Asked by: Lord Kempsell (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what are the estimated costs of reversing the policy of the previous government to freeze Civil Service hiring and reduce staff numbers to pre-COVID-19 levels.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
In a public statement on 2 October 2023, the previous Chancellor announced a cap on civil service numbers. This statement includes data on the estimated financial impacts of this policy for the remainder of the SR21 Spending Review period, ending in March 2025. It can be accessed at GOV.UK.
The headcount cap announced by the previous administration was lifted in July in line with taking immediate action to stop all non-essential government consultancy spend in 2024-25 and to halve government spending on consultancy in future years. At Autumn Budget, the government committed to developing a strategic plan for a more efficient and effective civil service through phase two of the multi-year spending review.
Asked by: Lord Kempsell (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact of applying Value Added Tax to independent school fees on Foreign, Commonwealth and Development Office staff based abroad who have children studying at UK boarding schools.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20%. This will include fees paid by CEA.
A small minority of diplomatic officials and service personnel are posted abroad for extended periods. In such circumstances, the Ministry of Defence and the Foreign and Commonwealth Office provide the Continuity of Education Allowance (CEA) to ensure this does not interfere with their children's education.
The government will monitor closely the impact of these policy changes on affected military and diplomatic families with any changes to this scheme being considered as part of the ongoing Spending Review.
Asked by: Lord Kempsell (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how they plan to assess the impact of the proposal to charge VAT on independent school fees at the upcoming spending review; and what is the latest date by which this spending review will be concluded.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20 per cent. This will also apply to boarding services provided by private schools.
The Government will confirm the introduction of these tax policy changes at the Budget on 30 October. Following scrutiny of the Government’s costing by the independent Office for Budget Responsibility, details of the Government’s assessment of the expected impacts of these policy changes will be published at the Budget in the usual way.
The Chancellor has launched a multi-year Spending Review to conclude in Spring 2025.
Asked by: Lord Kempsell (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they will exempt the children of UK armed forces personnel and diplomats who receive sponsorship for private education from their plan to impose VAT on independent school fees.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government is committed to breaking down barriers to opportunity, ensuring every child has access to high-quality education, which is why we have made the tough decision to end tax breaks for private schools. This will raise revenue for essential public services, including investing in the education system.
The Government has set out the details of this policy in the technical note Applying VAT to Private School Fees and Removing the Business Rates Charitable Rates Relief for Private Schools which can be found at the below link. A technical consultation on the technical note and draft VAT legislation will be open until 15 September 2024.
https://www.gov.uk/government/publications/vat-on-private-school-fees-removing-the-charitable-rates-relief-for-private-schools
Asked by: Lord Kempsell (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they will publish an impact assessment, including an equality impact assessment, of their plans to remove the VAT exemption on independent school fees.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
As set out by the Government in a Written Ministerial Statement on 29 July, the Government will introduce 20% VAT on education and boarding services provided for a charge by private schools across the UK from 1 January 2025. 20% VAT will also apply to pre-payments of fees for terms starting on or after 1 January 2025 made on or after 29 July 2024. These changes will not impact pupils with the most acute special educational needs, where their needs can only be met in private schools.
The Government will confirm the introduction of these tax changes at the Budget on 30 October. A Tax Information and Impact Note will be published alongside the Finance Bill.