Transport Taxation
Dan Tomlinson Excerpts(3 weeks ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
In March, the Government announced a review of mileage rates for employees using their own vehicle for work and the self-employed who use the simplified expenses rates.
In recognition of the pressures facing drivers as a result of the effects of the Iran war, the Government are today announcing the first uprating of mileage rates in 15 years, backdated to April, to provide immediate support to both groups.
Mileage rates will increase for 2026-27 from 45p to 55p for the first 10,000 miles, and 25p thereafter, with effect from 6 April 2026.
This will represent the largest ever increase to these mileage rates, benefiting around 2 million employees and 1 million self-employed individuals, saving over £120 a year for a worker doing 6,000 business miles.
The Government will legislate retrospectively for this change at the earliest opportunity. In the interim, HMRC will exercise its discretion and will not seek to collect any income tax or national insurance contributions that may otherwise arise on payments made before the legislation takes effect.
Looking ahead beyond 2026-27, the Government have already committed to a review of these rates and will set this out at the Budget.
This announcement is one part of a package of support for households and businesses announced today.
[HCWS62]
Transport Taxation
Dan Tomlinson Excerpts(3 weeks, 1 day ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
The Government are confirming action to support households and businesses with their fuel costs, in response to the conflict in the middle east.
Middle east context and existing Government action
A rapid de-escalation in the middle east remains the best way to bring down fuel prices, where the most impactful step is to reopen the strait of Hormuz. The UK Government are playing a leading role in the international effort to get shipping flowing freely.
Alongside this key step, the Government’s priorities will continue to be helping families with the cost of living, including through protecting the public finances to support the Bank of England with its role in keeping inflation as low as possible.
The Government have already taken action to bear down on prices at the pump. In November, the Government extended the 5p per litre cut in fuel duty for a further five months and ensured that fuel duty will not increase in line with inflation this year. The Government’s fuel finder scheme is delivering real benefits at the pump, with a growing number of apps and websites making near-live fuel prices available to drivers right across the UK. The CMA has stepped up its monitoring of petrol and diesel prices, recently publishing its first enhanced monitoring report on the impact of the conflict, with plans to report further in the coming week.
Petrol and diesel are currently 11p per litre cheaper than under plans inherited from the previous Government, and fuel duty has not been lower than it is now at any point in over 16 years. However, some fuels have been more impacted than others by this conflict, with jet fuel, diesel and heating oil prices increasing more than petrol. The Government also recognise the pressures being faced by drivers and other fuel users.
Going further to support motorists and other fuel users
Today, the Government are announcing a package worth over £400 million, which combines broad support for motorists with targeted support for sectors most exposed to and affected by higher fuel prices.
Fuel duty: 5p cut extension until end of 2026 to support motorists
The Government will not add to the cost of fuel while this war goes on, so there will be no rise this year. The temporary 5p per litre cut, which was introduced in 2022 and remains in place now, will be extended until the end of the year, providing certainty to motorists. This will save the average motorist over £120 compared to plans inherited from the previous Government, with hauliers and van drivers seeing greater savings. The proportionate percentage cut for rebated fuels, which includes red diesel, will also be extended.
This support for motorists builds on help for more families to get off the fossil fuel rollercoaster for good, through the over 110,000 electric car grants the Government have made in the last year to help people to switch to EVs. The Government have also worked to bring the cost down and convenience up to make electric driving work for more people, enabling motorists to save with every mile they drive, irrespective of the Iran conflict’s uncertain path. This change to fuel duty will ease the pressure on those not yet ready or able to make the switch.
Fuel duty: additional support for red diesel users
To support farmers, who face substantially increased costs on fertiliser and fuel, the Government will cut the duty rate on red diesel by over a third per litre from 10.18p to 6.48p, the lowest rate in over 20 years.
This lower rate will take effect from 15 June and remain in place until the end of the year, supporting the agricultural sector in the fuel-intensive harvest period through to the end of the year, and will also help other users of red diesel too, such as maritime, commercial fishing and rail freight.
HGV VED holiday: support for haulage
In recognising the key role the road haulage sector plays in transporting goods across the UK and their disproportionate exposure to fuel costs, the Government are introducing a 12-month holiday from vehicle excise duty for the majority of heavy goods vehicles, which will save a typical HGV £600 on top of savings from fuel duty. Fuel costs make up a substantial proportion of HGV operating costs, and this action will help prevent cost pressures from the Iran conflict spreading across the economy.
The Government will bring forward legislation to enact these changes.
Today’s announcement is one part of support for households and businesses. The Government will consider further action if price levels increase significantly. More broadly, the Government will continue to monitor the situation and make the necessary decisions to help protect consumers from price increases from the Iran war.
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UK-Isle of Man Social Security Agreement
Dan Tomlinson Excerpts(3 weeks, 2 days ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
A new social security agreement relating to national insurance contributions with the Isle of Man was agreed on 18 May 2026. It modernises the provisions in the 1977 agreement which determine where workers and employers pay their national insurance contributions, so that they operate in line with the social security agreement the UK has with Jersey and Guernsey, as well as those with other countries. The text of the agreement has been deposited in the Library in both Houses and will be made available on gov.uk.
The agreement will come into effect on the first day of the month after the UK and the Isle of Man have exchanged written confirmation that they have complied with their domestic requirements. The agreement will have effect in relation to the tax year beginning on or after 6 April next, following the date on which the agreement comes into effect.
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High Value Council Tax Surcharge: Consultation
Dan Tomlinson Excerpts(3 weeks, 2 days ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
In the 2025 Budget, the Government announced the introduction of a new high-value council tax surcharge—HVCTS—on owners of the most valuable 1% of residential properties in England. Today, together with the Secretary of State for Housing, Communities and Local Government, I am launching a consultation on the detailed design of this new surcharge.
Households living in lower value homes often pay more council tax, relative to the value of their property, than those in the most expensive homes. For example, a Band D home in parts of the north can face a higher annual council tax bill than a property worth many millions of pounds in parts of central London. The HVCTS will change that, implementing a significant reform to improve fairness within England’s property tax system, ensuring that those with the most valuable properties pay their fair share.
From April 2028, owners of residential properties valued at £2 million and above will be liable to pay the HVCTS, in addition to their existing council tax bill. Fewer than 1% of homes in England are expected to be affected. Properties will be valued for the purpose of the HVCTS and placed into one of four value bands, with fixed annual charges uprated in line with inflation. Council tax bands will remain separate to this new tax.
The consultation seeks views on the design of the tax including scope, support for those who cannot pay, how the tax will be administered and how owners can challenge and appeal their bill. The consultation also includes detailed information for local authorities, who will collect the tax on behalf of central Government. The revenue will be used to support funding for local government services. Local authorities will be fully compensated for any additional administrative burdens.
We welcome feedback on the detailed design set out in this consultation from local government, homeowners, tax experts, legal professionals and those in the property industry about the technical design and impact of the tax. The consultation will close on 14 July.
The consultation is available at:
https://www.gov.uk/government/consultations/high-value-council-tax-surcharge
[HCWS35]
Oral Answers to Questions
Dan Tomlinson Excerpts(1 month, 2 weeks ago)
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Wendy Morton (Aldridge-Brownhills) (Con)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
The Government have already taken action on fuel affordability at the pump. In last year’s Budget they extended the 5p per litre cap for a further five months, and they have also cancelled the increase that would have otherwise taken place in line with inflation at the start of this financial year.
Dave Doogan
If you were a gardener with a Renault Trafic or a builder with a Ford Ranger in Scotland, Mr Speaker, you would be paying over £150 just to fill up at the pump in order to get to work. When Spain and Poland and Germany and France and Italy and Ireland and Australia are all intervening to help their industry and economy, our Chancellor here stands idly by and congratulates herself on the quality of her inaction. We do not want to hear from Anas Sarwar in Scotland, because he promised £300 off our energy bills and they are now £700 higher than the level that he promised in 2024. We want to hear from the Chancellor. What is she going to do about diesel specifically, and when is she going to do it, to keep the grafters of Scotland turning up for work?
Dan Tomlinson
The Scottish National party has had ample opportunity in Scotland to invest in energy, to invest in energy infrastructure and to invest in the changes that we need in our economy to bring down energy bills, and when it comes to fuel duty—[Interruption.]
Dan Tomlinson
When it comes to fuel duty, it is of course worth noting that it is lower today, in cash terms, than it has been in any year since 2009.
Mr Mohindra
If the increase in fuel prices rather than the Chancellor’s two disastrous Budgets is to blame for the stagnating economy, why does the Chancellor believe that raising fuel duty further in September will help to reduce the cost of living when in fact it will harm the economy more, and will deliver another direct hit to the pockets of my constituents?
Dan Tomlinson
Before the conflict in Iran started we saw inflation falling, we saw unemployment falling and we saw growth increasing by 0.5% in one month at the start of the year. That showed that our economic plan was the right plan for this country, and it is important that we stick to it rather than returning to the bad old days of the high borrowing and high interest rates that the Conservatives brought us when they had a chance to run the economy.
Wendy Morton
Labour is at war with motorists, and Reform’s idea of protesting about fuel prices was revealed at their non-event yesterday—and, indeed, its members are not even here today. Only we on the Conservative Benches are standing up for our motorists and our constituents. Will the Chancellor take this opportunity to help our constituents, our businesses and our motorists, and adopt our plan to extend fuel duty relief—yes or no?
Dan Tomlinson
I agree with the right hon. Member that Reform’s rabble yesterday was deeply underwhelming. As for fuel duty, the rate is currently lower than it was at any point under the last Government, or, at least, it was never lower under the last Government than it is now. In real terms, it is lower than it has been at any point since 1993.
Bill Esterson (Sefton Central) (Lab)
The fuel duty freeze is of course very welcome for drivers of petrol and diesel vehicles, but this is the second time in just over four years that petrol and diesel prices have gone through the roof as a result of international oil and gas uncertainty. Is it not time that we gave as much support as possible to those who want to make the transition to electric vehicles? According to Autotrader, the average price of electric vehicles is already lower than that of petrol and diesel vehicles. Will the Government confirm that they are bringing forward plans for greater ability to charge at home and bringing down the cost of electricity as far and as fast as possible, so that more drivers can benefit from long-term lower driving costs?
Dan Tomlinson
My hon. Friend is right to say that we are seeing a continued uptake of electric vehicles—we saw that in March this year. More electric vehicles were purchased in March than in any month in British history, and we can see that take-up is continuing to increase. This Government are increasing and expanding the grants for those who want to buy an electric vehicle, and we are making progress on permitted development rights, so that those who do not have easy access to charging in their driveways can have easy and cheap access to on-street charging.
Gerald Jones (Merthyr Tydfil and Aberdare) (Lab)
Even before the current conflict in the middle east, fuel suppliers in the Merthyr Tydfil part of my constituency were charging an average of 10p per litre more than those in other parts of my constituency and neighbouring towns. Even London fuel prices were cheaper than they were in Merthyr Tydfil, and the situation has not improved since. I have written to suppliers and met some, with limited success, and I have asked the Competition and Markets Authority to look at the matter, which it has so far not done. May I ask the Chancellor to offer whatever assistance she can and to urge fuel providers in Merthyr Tydfil to act fairly? Will she urge the CMA to consider what it can do to ensure fair play for my constituents?
Dan Tomlinson
I thank my hon. Friend for his representations, and for the work that he is undertaking on behalf of his constituents in a rural part of our country. We are making sure that all garages are on the new fuel finder website that the Chancellor has introduced. That should drive up competition and make it easier for the people he represents to compare the cost at the pumps in different garages nearby. It is good to hear that he has been in touch with the CMA; the Chancellor, too, has been in discussion with it about making sure that we have competition in this industry. If I can help him to get a meeting with the CMA, I will happily assist.
James Wild (North West Norfolk) (Con)
Whereas the Conservatives froze fuel duty for 14 years, Labour is planning to increase it by 5p, costing families £150 a year and hauliers £2,000. When the Chancellor was asked to reverse her hike, she said she was
“loath to spend Government money”
to do so. There is no such thing as Government money; there is only taxpayers’ money. Rather than increase taxes again, will she actually help households and businesses facing higher prices and scrap this fuel hike?
Dan Tomlinson
We on the Labour Benches are fiscally responsible. We will make sure that we continue to get borrowing down in a sustainable way, as we did over the last financial year, when borrowing fell by £20 billion. Whenever the Conservatives have had the chance, they have borrowed more, which pushes up interest rates for families and means that we have to have higher taxes in the long run. That is not the approach that we will take. The plans that the Conservatives set out in their final Budget before they left office would have seen fuel duty increase every single year. Instead, we have frozen it since we took over.
Leigh Ingham (Stafford) (Lab)
Peter Fortune (Bromley and Biggin Hill) (Con)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
The reforms to business property relief maintain significant relief for owners of business assets. That is beyond what is available to others and is more generous than at any time under Margaret Thatcher, for example, when the rate of relief was a maximum of 50% on all business assets, including the first £2.5 million. I do not think that Conservative Members would argue that we did not see growth in the private sector while Thatcher was in power.
Peter Fortune
I agree with the Minister, of course, that Margaret Thatcher really was the sunny uplands of this country.
Small and medium-sized enterprises provide the backbone for our economy in Bromley and Biggin Hill. Many of those businesses are still family owned, suffering from the slew of taxation from this Labour Government. Family Business UK’s analysis, published just last month, said that 57% of businesses are still suffering from the business property relief that, despite the slight U-turn that the Minister alluded to, is still impacting their business. Does the Minister agree that the best way to growth is to support small businesses and not to tax them out of existence?
Dan Tomlinson
I am glad that the hon. Gentleman acknowledges that while Margaret Thatcher was in power she was taxing such businesses through business property relief more than this Labour Government. We have a fair and balanced approach when it comes to making sure that we can raise revenues from the very largest businesses, including agricultural businesses, so that we can sustainably support the reduction in borrowing that this Government are bringing about.
Perran Moon (Camborne and Redruth) (Lab)
Hundreds of small family businesses across Cornwall will soon be subject to a significant increase in their property costs as a result of the Valuation Office Agency’s decision to reclassify serviced offices, business centres and co-working spaces. Will the Chancellor arrange for me to meet Treasury officials and the VOA to discuss how the impacts of that reclassification may be mitigated?
Dan Tomlinson
I thank my hon. Friend for his question. I am aware of the issue that he raises; I have met representatives of the sector in recent weeks to discuss it. It follows changes to case law over recent years, but it is of course an important issue that affects many businesses. I would be happy to meet my hon. Friend to discuss it.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
Bradley Thomas (Bromsgrove) (Con)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
The Government have introduced a support package worth £4.3 billion to protect rate payers across the country against the impact of the independently set new property values, whereby properties have been valued for the first time since the pandemic. We have also introduced permanently lower multipliers for eligible retail, hospitality and leisure properties worth nearly £1 billion a year, and this will benefit more than 750,000 high street businesses.
Bradley Thomas
I recently met Chris, the owner of Chapters Hair in Bromsgrove, who told me that current conditions are the most difficult he has faced in 25 years of trading, which he attributes directly to the decisions taken by the Chancellor. Why is it that the Chancellor of the Exchequer and the Government across the board are riding roughshod over what business owners think—the people who know best how to run their businesses—and when will the Government get off their backs and get on their side?
Dan Tomlinson
Under the previous Government, the business rates multiplier—the tax rate—paid by medium-sized businesses and the very largest businesses was exactly the same. We have implemented significant reforms to the way businesses rates work so that the system supports the high street, and the tax rate paid by small high street businesses will now be 33% lower than the rate paid by the largest properties, such as online giants. Of course, the revaluation since the pandemic has had an effect, and that is why we have stepped in to provide support.
Richard Fuller (North Bedfordshire) (Con)
This month, a comprehensive survey by UKHospitality showed that one in seven of our hotels, pubs and restaurants will close as a direct result of the Chancellor’s policies. Many of those businesses represent the hopes and dreams, hard work and savings of the people who set them up. Therefore, as I am permitted, rather than having the Minister come to the Dispatch Box, may I ask the Chancellor to come to the Dispatch Box to answer this? If it was not me standing here but one of those people who had founded a business and is now going through the gut-wrenching process of closing it because of her policies, what would she say to them?
Dan Tomlinson
Of course, the Government want to do all we can to support businesses up and down the country—small, medium and large. That is why we are working hard to put the economic stagnation we had over the last 14 years behind us. We are seeing economic growth rising—growing by 0.5% in February; we saw unemployment falling; and we were seeing Government borrowing falling as well. Those are the long-term changes we need to lay the foundations so that businesses can grow, invest and hire more people. It is disappointing that the Conservatives seem to have forgotten what we need to provide stability in our economy.
Cat Smith (Lancaster and Wyre) (Lab)
Daisy Cooper (St Albans) (LD)
Business rates bills have been landing on doormats over the last few weeks, and some small businesses in St Albans and beyond tell me that the future looks bleak, with some taking the crushing decision to close their doors. Will the Chancellor please look again at the eye-watering revaluations and release the full 20p discount for small businesses, which the Government legislated to do, to save our high streets?
The Exchequer Secretary to the Treasury (Dan Tomlinson)
On business rates, the hon. Member will know that this Government inherited the plans that were set in train for an independent revaluation of properties to take place for the first time since the pandemic. It would not have been the right thing to do to delay that independent revaluation for those businesses who have seen their rates fall since the pandemic, so we went ahead with it, and we then put in £4.3 billion of support to limit the increases in bills that businesses would pay. Of course we keep all taxes under review, but we have for the first time put in a differential within the business rates system so that high street businesses face a lower tax rate—a lower multiplier—than the largest online giants.
Antonia Bance (Tipton and Wednesbury) (Lab)
Mr Speaker
Order. This is topical questions, and I want to get other colleagues in, please.
Dan Tomlinson
I am always happy to take questions on business rates, even months after the decision set out at the Budget, and I thank the hon. Member for reading out the Labour manifesto. We have made significant changes to business rates by introducing the new lower multiplier for high street businesses so that they can pay a lower tax rate than the largest online giants.
Chris Bloore (Redditch) (Lab)
Draft Vaping Duty Stamps (Requirements, Reviews and Appeals) Regulations 2026
Dan Tomlinson Excerpts(1 month, 2 weeks ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
I beg to move,
That the Committee has considered the draft Vaping Duty Stamps (Requirements, Reviews and Appeals) Regulations 2026.
It is a pleasure to serve under your chairship, Ms Vaz. The draft regulations make provision for when vaping products must and must not bear a duty stamp, and ensure that decisions made in relation to United Kingdom representatives are subject to rights of review and appeal. They do so by setting out the stamping requirements that will apply under the vaping duty stamps scheme, and by amending the Finance Act 1994 so that relevant decisions fall within the existing review and appeal framework. The draft regulations provide part of the detailed framework needed for the administration, control and enforcement of vaping products duty and the vaping duty stamps scheme.
At the 2024 Budget, the Chancellor confirmed the structure and rate of vaping products duty; the new duty will be charged at a flat rate of £2.20 per 10 ml on all vaping liquid from 1 October 2026. Vaping duty stamps are the primary compliance mechanism for the new tax, requiring every duty-paid vaping product to carry a highly secure, scannable label. These stamps provide a visible and traceable confirmation that duty has been paid, enabling His Majesty’s Revenue and Customs and other agencies to assess compliance, and strengthening enforcement in a market with high risks of illicit activity. They also give retailers and consumers confidence that the products they are purchasing are legitimate.
Let me summarise the three measures in the draft regulations. First, they set out when vaping products must bear a duty stamp. Under the draft regulations, vaping products produced or imported on or after 1 October 2026 must be stamped at or before the point at which they pass an excise duty point. Products produced or imported before 1 October 2026 must be stamped by 1 April 2027.
Secondly, the draft regulations set out where the duty stamp requirement does not apply. They apply exceptions for products possessed by a private individual for that individual’s own use; products to be exported from the United Kingdom; products to be shipped or carried on a ship, aircraft or train as stores; products to be used in an export shop; and products that are afforded relief from excise duty.
Thirdly, the draft regulations provide for reviews and appeals in relation to United Kingdom representatives in the vaping duty stamps scheme. They achieve this by amending the Finance Act 1994, so that decisions relating to UK representatives fall within the existing statutory review and appeal framework. This means that decisions made by HMRC in relation to such representatives—those acting on behalf of overseas businesses for duty stamps purposes—can be reviewed and, where appropriate, appealed in an independent tribunal. This is an important safeguard, as the vaping duty stamps scheme expressly provides a role for UK representatives where overseas manufacturers wish to supply to the UK market.
I hope that members of the Committee will join me in supporting the draft regulations.
Dan Tomlinson
I thank the Opposition spokesmen for their questions and continued scrutiny of this important new measure that the Government are introducing to support our vaping products duty.
I am satisfied that the timelines are appropriate: registration opened on 1 April, giving businesses six months to apply. As I mentioned, products imported to the UK before 1 October this year will have a longer period before they are subject to enforcement.
There is always a risk that increases in rates of taxation will change consumers’ behaviour.
Vicky Foxcroft (Lewisham North) (Lab)
I declare an interest: I have not smoked for more than a decade, and I vape. Does the Minister agree that we have to be careful that the language we use does not discourage people from changing from smoking to vaping? Vaping has been shown to be successful in getting many people to stop smoking. The health benefits are there. None of us wants young people to vape, but vaping is successful in getting long-term smokers to move off smoking.
Dan Tomlinson
My hon. Friend makes an important point. The emergence of vapes in recent years has provided people up and down the country with a route away from smoking. That is to be welcomed. At the same time, the chief medical officer is right to highlight the risks and health impacts associated with vaping, although they may be lower than the impact of smoking cigarettes.
Vicky Foxcroft
The Minister says they may be lower. I believe it is said that they are significantly lower.
Dan Tomlinson
I am not an expert on the differences in the health impacts, and I trust my hon. Friend’s expertise and experience in this space. However, the chief medical officer is clear that there are still health impacts, and he supports the changes we have made. It is worth highlighting that, although the vaping products duty will be introduced at the rate of £2.20 per 10 ml, we are increasing the duty on cigarettes so that the tax differential is maintained. I thank my hon. Friend for her interventions and the insight she has brought to today’s debate.
On enforcement, HMRC is in the process of recruiting more than 300 new compliance officers. As the shadow Exchequer Secretary mentioned, £10 million of additional funding will be made available for Border Force. We are confident that the cost of implementing this measure will be outweighed many times over by the benefits to the Exchequer of the additional revenue it brings in. Unlike the one-off set-up costs, that additional revenue is there for the long term,. The vaping products duty will bring in £565 million by 2030.
The shadow Exchequer Secretary is always right to mention the need for timely and up-to-date guidance, and I will press officials to make sure we get the guidance out as soon as we can if more clarity is required. When it comes to individual procurement decisions, I am aware of the case he mentioned. HMRC assures me that it followed robust and proper processes in that case, as it does in all procurement. The bids underwent thorough evaluation and assurance process, and we follow strict procurement rules when awarding contracts, ensuring value for money for taxpayers. As for the subject of HMRC enforcement action, we will make sure to enforce against the appropriate person or business in each relevant case.
Question put and agreed to.
Stamp Duty Land Tax: Periodic Tenancies
Dan Tomlinson Excerpts(1 month, 2 weeks ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
Tenant wellbeing is central to the Government’s recent Renters’ Rights Act 2025, which will deliver on our manifesto commitment to transform the experience of private renting and give renters much greater security and stability so that they can stay in their homes for longer.
The Act will improve the current system for both the 11 million private renters and the 2.3 million landlords in England. It will give renters much greater security and stability so that they can stay in their homes for longer, build lives in their communities, and avoid the risk of homelessness.
The Government are today setting out our intention to ensure that no one is newly brought into stamp duty land tax as a result of the changes in the Renters’ Rights Act.
Although most people understand how SDLT applies when related to the change of ownership of a property, it is also charged on some rents when their net present value exceeds £125,000. In practice, the vast majority of private tenants do not reach the SDLT threshold of £125,000 and so do not pay SDLT on their rent. This is because assured shorthold tenancies, which make up the majority of private tenancies, are likely to renew regularly, so the net present value of the rent is calculated over a relatively short duration.
From 1 May 2026, the Renters’ Rights Act will abolish fixed-term assured shorthold tenancies. Instead, all tenancies will be periodic, with tenants able to stay in their home until they decide to end the tenancy by giving two months’ notice. This will end the injustice of tenants being trapped paying rent for substandard properties and offer more flexibility to both parties to respond to changing circumstances.
Following this change, the net present value of rent under a continuing lease will be calculated assuming a lease that continues indefinitely. This means the net present value of the rent could increase and exceed the £125,000 threshold at which SDLT becomes payable, even though the underlying tenancy arrangements have not substantively changed.
The Government intend to legislate in the 2026-27 Finance Bill so that any residential lease that will be considered an assured tenancy under the Housing Act 1988, as amended by the Renters’ Rights Act, will not give rise to a SDLT charge on the rent element. The Government will set out the detail of this legislation at or before this year’s Budget.
The legislation will apply retrospectively from the date on which existing tenancies become section 4A assured tenancies—as defined in section 146 of the Renters’ Rights Act), which is expected to be on 1 May 2026.
HM Revenue and Customs will not collect any SDLT on the rent element of an assured tenancy from that date until the date the legislation takes overriding effect.
This measure ensures that tenants and landlords are not adversely affected by technical interactions between the Renters Rights Act and SDLT legislation, and reflects the Government’s commitment to the smooth and fair implementation of reforms to the private rented sector.
[HCWS1535]
Oil and Gas Decommissioning Relief Deeds
Dan Tomlinson Excerpts(1 month, 2 weeks ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
The Government’s fiscal approach for oil and gas aims to balance supporting investment and growth with ensuring a fair return for the nation in exchange for the use of its resources.
At Budget 2013, the Government announced they would begin signing decommissioning relief deeds. These deeds represented a new contractual approach to provide oil and gas companies with certainty on the level of tax relief they will receive on future decommissioning costs.
Since October 2013, the Government have entered into 110 decommissioning relief deeds. Offshore Energies UK estimates that these deeds have so far unlocked approximately £13.5 billion of capital, which can now be invested elsewhere.
The Government committed to report to Parliament annually on progress with the decommissioning relief deeds. The report for financial year 2024-25 is provided below.
Number of decommissioning relief agreements entered into: the Government entered into one decommissioning relief agreement in 2024-25.
Total number of decommissioning relief agreements in force at the end of the 2024-25 financial year: 109 decommissioning relief agreements were in force at the end of the financial year. We have entered into one more agreement since the end of the 2024-25 financial year, but this is out of scope of the report.
Number of payments made under any decommissioning relief agreements during that year, and the amount of each payment: five payments were made under a decommissioning relief agreement in 2024-25, for £9.55 million in total. These were made in relation to the provisions recognised by HM Treasury from 2015 onwards as a result of companies defaulting on their decommissioning obligations.
Total number of payments that have been made under any decommissioning relief agreements as at the end of that year, and the total amount of those payments: 24 payments have been made under any decommissioning relief agreement as at the end of the 2024-25 financial year, totalling around £355 million.
Estimate of the maximum amount liable to be paid under any decommissioning relief agreements: the Government have not made any changes to the tax regime that would generate a liability to be paid under any decommissioning relief agreements. HM Treasury’s 2025-26 accounts will recognise a provision currently estimated to be £133 million in respect of decommissioning expenditure incurred as a result of companies defaulting on their decommissioning obligations [1]. The majority of this is currently expected to be realised over the next five years.
[1] This figure which is an estimate at the last interim reporting period is unaudited and takes into account payments made subsequent to the financial year covered by this written ministerial statement. The estimate is under review and subject to audit ahead of the year end reporting period and may be updated to reflect newer information or changes required by accounting standards.
[HCWS1534]
Draft Major Sporting Events (Income Tax Exemption) (Glasgow 2026 Commonwealth Games) Regulations 2026
Dan Tomlinson Excerpts(1 month, 3 weeks ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
I beg to move,
That the Committee has considered the draft Major Sporting Events (Income Tax Exemption) (Glasgow 2026 Commonwealth Games) Regulations 2026.
It is a pleasure to appear before you today, Sir Alec. The draft regulations provide an income tax exemption for non-UK resident competitors, officials and certain other designated individuals employed by or associated with the participating national teams and international federations, or otherwise involved with the Glasgow 2026 Commonwealth games.
The Government recognise the great benefits that all sport—including sport at the highest level—brings to this country. International tournaments inspire the next generation of athletes, bring together communities and boost the economy. I am sure that members of the Committee will be aware of the Government’s commitment to making the UK an attractive location to host world-class sporting events.
Successive Governments have provided income tax exemptions for hosting major sporting events, such as the 2022 Birmingham Commonwealth games, the 2023 Women’s Finalissima, the 2024 UEFA champions league final and the 2024 world athletics indoor championships. I should point out that tax exemptions of this type are reserved for only the most exceptional events. I am hopeful—indeed, confident—that the Committee will agree that this event meets that criterion.
The exemption covers income directly related to participating in the Glasgow 2026 Commonwealth games as well as income arising in relation to services and duties performed specifically for the event. Being exposed to taxes in two countries is administratively complex and consideration would also have to be given to matters such as withholding taxes, completing self-assessment tax returns and the relevant double taxation treaties.
The income tax exemptions for the Glasgow 2026 Commonwealth games further support the Government’s commitment to make the UK a global destination for world-class sport. I commend the regulations to the Committee.
Dan Tomlinson
I thank all Members for their contributions and questions. It is fantastic that the city of my hon. Friend the Member for Glasgow East will host the Commonwealth games again. They were a great success for the country and for countries throughout the Commonwealth last time they were held in that great city. I know that it has had some difficult times lately with the fire at Glasgow Central station. I hope that this summer, we can all enjoy the best that Glasgow has to offer, including the sporting events in Glasgow East.
I thank the shadow Exchequer Secretary for reminding the Committee that he stands up as a thinking man’s Al Carns.
Dan Tomlinson
I spent four weeks deliberating on whether to put out that video and I deeply regret the decision to do so.
As ever, the shadow Exchequer Secretary asked important and pertinent questions. He asked why the dates do not align with those of the games. That is because many athletes will not be here for those precise dates. Those involved with the sporting teams or with the relevant accreditation may come here in the previous days and weeks. The dates have been set in the usual way; it is typical practice.
On the hon. Gentleman’s first question about accreditation, the Department for Culture, Media and Sport will work closely with the Commonwealth games on that, as they have done for previous sporting events, to ensure that the right people are accredited. He also asked whether HMRC will ensure that income is treated and taxed correctly and appropriately. I give the previous Government credit for making progress on closing the tax gap. We are glad to continue with that. The tax gap has fallen this year and is set to fall further over the rest of the Parliament. We will of course keep a weather eye on the activities of those coming here.
The hon. Member for Torbay asked an important question about what else the Government are doing to support the Commonwealth games. Last June, we pledged to spend at least £400 million on grassroots facilities over the next four years to support those who live in close proximity to the games. I hope that those who are considering competing will not just think about whether they have to pay tax in two countries or the double taxation treaties, but will find an inducement in participating and celebrating their skills, training and hard work. Perhaps the joy of a medal will also be an inducement.
Again, I thank Members for their contributions and commend the regulations to the Committee.
Question put and agreed to
Electricity Generator Levy
Dan Tomlinson Excerpts(1 month, 3 weeks ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
The electricity generator levy was introduced in 2023 and is a temporary tax on windfall revenues for large renewables. The EGL is currently calculated as 45% of a generator’s annual revenue above a benchmark price, which is currently £82.61 per MWh and has been increased in line with the consumer prices index since 2024. New investments in renewable energy are not subject to the EGL.
When gas prices are high, renewable generators that are not in receipt of contracts for difference receive substantial increases in revenue because they can sell the electricity they generate at higher prices, without having any new costs.
The Government have reviewed the design of the EGL in light of the conflict in the middle east and are announcing today that the 45% EGL rate will increase to 55% and will be extended past its scheduled conclusion in 2028. This will support the Government’s objective of reducing the impact of gas prices on businesses and households. Firstly, it will encourage participation at a competitive price in wholesale contracts for difference, a new proposal announced today by the Secretary of State for Energy Security and Net Zero, my right hon. Friend the Member for Doncaster North (Ed Miliband), which seeks to weaken the link between high gas prices and high electricity generation prices. Secondly, it will ensure a proportion of any exceptional revenues resulting from the pass-through of high gas prices to electricity generators’ revenues is available to Government to support businesses and households with the impacts of the conflict in the middle east on the cost of living.
The rate increase will take effect from 1 July 2026 to respond to the high prices that generators are benefiting from now because of the crisis in the middle east.
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