Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of removing VAT on pilot flight training courses.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
Pilot training may be exempt from VAT when provided by an eligible body which meets certain conditions (for example, when provided by a government institution or certain regulated organisations), but otherwise will be subject to the standard rate. The Government currently has no plans to remove VAT on pilot flight training courses more broadly. VAT has been designed as a broad-based tax on consumption, and the twenty per cent standard rate applies to the vast majority of goods and services. While there are exceptions to the standard rate, these have always been strictly limited by both legal and fiscal considerations.
Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of introducing a new tax-free shopping incentive for international visitors.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
Tax-free shopping continues to be available for all non-UK visitors who purchase items in store if they have them sent directly to their overseas address. This also applies to overseas shoppers who buy from British businesses online and have items delivered to their overseas address.
The independent Office of Budget Responsibility published their assessment of the withdrawal of the previous VAT-free shopping schemes in November 2020. At the time, this showed that the withdrawal of VAT-free shopping would raise a significant amount of revenue and have a limited effect on decisions to visit, or spend, in Great Britain.
The government is accepting representations from industry on VAT-free shopping and considering these, alongside broader data.
Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with the retail and travel industries on the effect of the withdrawal of tax-free shopping for international visitors on those sectors.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
As the UK’s economic and finance ministry, HM Treasury has regular discussions with representatives from a wide range of industries including travel and retail as well as business representative organisations covering many sectors.
As announced in the Autumn Statement, the government is continuing to accept representations from industry on the impact of this policy decision and considering this evidence alongside broader data.
Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has considered the potential merits of removing VAT from all defibrillators sold in the UK.
Answered by Victoria Atkins - Secretary of State for Health and Social Care
The Government maintains VAT reliefs to aid the purchase of Automated External Defibrillators (AEDs), including VAT relief on purchases made by local authorities and those made through voluntary contributions, where the AED is donated to eligible charities or the NHS. Otherwise, they attract the standard rate of VAT.
The Government is currently inviting community organisations to bid for funding as part of a £1 million grant scheme that expands public access to AEDs, particularly in public places where they are most needed. In addition, in June 2023, the Government met its commitment to ensure that all state-funded schools in England have access to a life-saving defibrillator.
The Government keeps all taxes under review.
Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent estimate he has made of the fiscal impact on economy of the removal of tax-free shopping for overseas visitors in summer 2023.
Answered by Gareth Davies - Exchequer Secretary (HM Treasury)
The Government engaged with varied stakeholders and produced analysis on the cost of the VAT Retail Export Scheme (RES) before withdrawing it. Our analysis, which took increased tourist spending into account, found that introducing worldwide VAT-free shopping would come at a fiscal cost of £2 billion each year.
Furthermore, the OBR’s assessment of the previous VAT RES shopping scheme showed that its withdrawal would have a limited behavioural effect on decisions to visit, or spend, in the UK.
Although there are no plans to re-introduce VAT RES, the Government keeps all taxes under review and welcomes representations to help inform future decisions on tax policy, as part of the tax policy making cycle and Budget process.
Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to use funds raised from the removal of Emissions Trading Scheme free allocations for airlines to support the aviation industry to decarbonise.
Answered by Gareth Davies - Exchequer Secretary (HM Treasury)
On July 3, the UK ETS Authority announced free allocation will be withdrawn from airline operators participating in the Emissions Trading Scheme after 2026. Operators will then be required to purchase allowances to cover their emissions fully.
The UK ETS Authority also announced that the overall number of allowances sold under the Emissions Trading Scheme will fall to be on a trajectory consistent with Net Zero. This takes the decline of free allocation to the aviation sector into account. That means that overall, no additional revenue will be raised from removing free allocations for airlines.
Revenue from the sale of allowances is used to support the Government’s wider priorities, including net zero policies.
Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will commission a review by the Office for Budget Responsibility into the impact of tax free shopping at (a) airports and (b) ports on the economy.
Answered by James Cartlidge - Minister of State (Ministry of Defence)
In October 2022, to ensure the UK’s economic stability and to provide confidence in the Government’s commitment to fiscal discipline, the Chancellor announced that the Government will not be proceeding with plans to introduce a new VAT-free shopping scheme. Such a scheme would come at a significant fiscal cost as it would subsidise a large amount of tourist spending which already occurs without a tax relief in place.
The independent Office for Budget Responsibility published their assessment of the withdrawal of the previous VAT-free shopping schemes in November 2020. This showed that withdrawal would raise a significant amount of revenue and have a limited behavioural effect on decisions to visit, or spend, in the UK. Although the Government keeps all taxes under review and continues to consider all available evidence as part of the policy-making process, there are no current plans to commission a further assessment.
Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has had discussions with the Secretary of State for Transport on the potential merits of introducing a price stability mechanism for the production of sustainable aviation fuel in the UK.
Answered by James Cartlidge - Minister of State (Ministry of Defence)
The government is committed to supporting the uptake of Sustainable Aviation Fuels (SAF). A SAF mandate will be introduced to drive demand. A consultation setting out further detail on the mandate and potential uptake trajectories for SAF was published on 30 March. It reaffirms our commitment that at least 10% of fuel must be made from sustainable sources by 2030.
The government is investing in SAF plants to boost supply. 8 SAF plants received support through the green fuels, green skies competition. A further £165m is being invested through the Advanced Fuels Fund between 2022 – 25 to support UK SAF plants reach commercial scale.
DfT commissioned an independent review in October 2022 to understand how to accelerate investment in a UK SAF industry. The government will publish the review and respond to it shortly. The government has been clear that it wants to see the UK continue to capture its share of the global SAF market and play a leading role in the development, production and use of SAF. As the response to the independent report will set out, government will continue to work in partnership with industry and investors to explore the best approach to addressing barriers to investment.
Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of implementing a contracts for difference scheme, similar to that used to in the wind sector, for the production of sustainable aviation fuels.
Answered by James Cartlidge - Minister of State (Ministry of Defence)
The government is committed to supporting the uptake of Sustainable Aviation Fuels (SAF). A SAF mandate will be introduced to drive demand. A consultation setting out further detail on the mandate and potential uptake trajectories for SAF was published on 30 March. It reaffirms our commitment that at least 10% of fuel must be made from sustainable sources by 2030.
The government is investing in SAF plants to boost supply. 8 SAF plants received support through the green fuels, green skies competition. A further £165m is being invested through the Advanced Fuels Fund between 2022 – 25 to support UK SAF plants reach commercial scale.
DfT commissioned an independent review in October 2022 to understand how to accelerate investment in a UK SAF industry. The government will publish the review and respond to it shortly. The government has been clear that it wants to see the UK continue to capture its share of the global SAF market and play a leading role in the development, production and use of SAF. As the response to the independent report will set out, government will continue to work in partnership with industry and investors to explore the best approach to addressing barriers to investment.
Asked by: Henry Smith (Conservative - Crawley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of introducing a price support mechanism for sustainable aviation fuel.
Answered by James Cartlidge - Minister of State (Ministry of Defence)
The government is committed to supporting the uptake of Sustainable Aviation Fuels (SAF). A SAF mandate will be introduced to drive demand. A consultation setting out further detail on the mandate and potential uptake trajectories for SAF was published on 30 March. It reaffirms our commitment that at least 10% of fuel must be made from sustainable sources by 2030.
The government is investing in SAF plants to boost supply. 8 SAF plants received support through the green fuels, green skies competition. A further £165m is being invested through the Advanced Fuels Fund between 2022 – 25 to support UK SAF plants reach commercial scale.
DfT commissioned an independent review in October 2022 to understand how to accelerate investment in a UK SAF industry. The government will publish the review and respond to it shortly. The government has been clear that it wants to see the UK continue to capture its share of the global SAF market and play a leading role in the development, production and use of SAF. As the response to the independent report will set out, government will continue to work in partnership with industry and investors to explore the best approach to addressing barriers to investment.