Asked by: David Chadwick (Liberal Democrat - Brecon, Radnor and Cwm Tawe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate she has made of how many farms in Wales will be affected by the changes to agricultural property relief in each of the next five years.
Answered by James Murray - Exchequer Secretary (HM Treasury)
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, and further explanatory information at https://www.gov.uk/government/news/what-are-the-changes-to-agricultural-property-relief. Around 500 estates across the UK are expected to be affected each year from 2026-27.
In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.
Asked by: David Chadwick (Liberal Democrat - Brecon, Radnor and Cwm Tawe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many businesses in Wales will benefit from changes to employment allowance.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Estimates of the number of businesses in Wales that will benefit from changes to the Employment Allowance announced at Autumn Budget 2024 are not available.
Asked by: David Chadwick (Liberal Democrat - Brecon, Radnor and Cwm Tawe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will bring forward legislative proposals to extend eligibility for trivial commutation.
Answered by Tulip Siddiq - Economic Secretary (HM Treasury)
My response to Parliamentary Question 11127 provides more details on the rules around trivial commutation.
The purpose of these rules is to provide individuals with flexibility, while also helping to reduce the administrative burden on pension schemes of paying small pensions. In the case of trivial commutation, the £30,000 limit applies to the aggregate value of an individual’s pensions, rather than to each pension pot. This is to prevent the commutation of much larger – non-trivial - pensions by splitting them into multiple smaller pots just before retirement.
The Government has no current plans to extend this limit.
Asked by: David Chadwick (Liberal Democrat - Brecon, Radnor and Cwm Tawe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of reinstating trivial commutation following the changes to the Lifetime Allowance this year.
Answered by Tulip Siddiq - Economic Secretary (HM Treasury)
For defined benefit (DB) pensions, trivial commutation continues to exist. If an individual’s total pension wealth across all DB pension schemes (excluding their state pension) is no more than £30,000, they may be able to surrender their pension for a taxable one-off payment (though usually up to 25% is available tax-free as with other kinds of pension withdrawal). Alternatively, if an individual’s pension within a scheme is valued at no more than £10,000, it may be possible to surrender this for a taxable one-off payment without any assessment against their total pension wealth.
For defined contribution pensions, trivial commutation was removed because Pension Freedoms reforms meant that trivial commutation was no longer needed.
Asked by: David Chadwick (Liberal Democrat - Brecon, Radnor and Cwm Tawe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of removing the VAT charges on medicines dispensed in hospitals.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Where medications are provided as part of the NHS’s statutory obligation of medical care, they are exempt from VAT. This means that medications are VAT-free for patients when provided to an in-patient in hospital. Furthermore, medications for out-patients prescribed by most hospital pharmacies are zero-rated for VAT, meaning that these pharmacies can recover their VAT costs and the medication is also VAT-free for patients.
While the NHS is unable to reclaim its VAT costs, due to the exemption, this irrecoverable VAT is taken into account in NHS funding.
Asked by: David Chadwick (Liberal Democrat - Brecon, Radnor and Cwm Tawe)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will remove VAT from medicines for NHS hospitals.
Answered by James Murray - Exchequer Secretary (HM Treasury)
As the NHS is a public body and is not in business for VAT purposes, the VAT charged by the supplier on the total price of the medications cannot be reclaimed from HMRC. Many public bodies incur VAT in a similar way whilst delivering their statutory responsibilities, and HM Treasury funds them, including the NHS, with this irrecoverable VAT in mind.
There are no current plans to change the VAT treatment of medicines for NHS hospitals. The government keeps all taxes under review.