Oral Answers to Questions

Claire Young Excerpts

Tuesday 23rd June 2026 Commons Chamber

[Dan Tomlinson]

I understand that the VAT rate in Northern Ireland is different from the rate in Ireland—there are different rates of VAT across Europe. It is important to remember that VAT is a national tax in the UK, at 20% across the country. It is important to have consistency for businesses operating across the UK. Significant cuts to VAT come with significant fiscal costs. For example, halving the rate of VAT on hospitality would cost the Exchequer about £11 billion.

[Claire Young (Thornbury and Yate) (LD)]

5. What steps she is taking to reform business rates.

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

I am very busy today, Mr Speaker, as ever. I thank the hon. Member for asking about business rates. She will know that we have already started the work of reforming the business rates system so that we can put in permanently lower multipliers for high street businesses. As part of tax update day, we will be consulting on ways to collect more of the VAT that online sellers dodge by making online marketplaces liable for VAT on both UK and overseas business sales of goods. We will put every penny of the additional revenue raised into improving the business rates system for high street businesses.

[Claire Young]

When I met Chipping Sodbury chamber of commerce recently, business owners told me that the business rates system is broken and unfair, in part because it is based on turnover, not profit. In response to a letter, the Exchequer Secretary promised to bear in mind the points that I had raised ahead of future Budgets. Does he now accept that the business rates system is broken, and that rather than being reformed it should be abolished and replaced with a fairer system?

[Dan Tomlinson]

We have a tax on profits in the UK, which is corporation tax. In our corporate tax road map, we have committed to keeping that stable in this Parliament, rather than having it jump around as it did in the last one. It is important to have a broad tax base, so it is reasonable for business rates to continue to be—as they have been since the late 1980s—set in accordance with an estimate of the rents of properties. I do not think it would be right to change that.