Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of changing from a motive or purpose test to an outcome test as outlined in the draft Finance Bill 2025–26 on the volume of charity donations.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Charities rightly enjoy generous tax reliefs. However, a small number of charities are receiving tax relief in ways that were not intended by Parliament. Charity tax rules are being strengthened to improve HMRC’s ability to challenge abusive arrangements in an appropriate and proportionate way.
The new charity rules in the Finance Bill 2025-26 for legacy giving will ensure a charity uses tax relieved income for its charitable purposes. They will not require charities to spend gifts from wills within a set timeframe.
The new rules will replace the current purpose test with an outcome test. This will better prevent the abuse of tax reliefs through arrangements designed to give financial advantages to donors in return for their donation.
Updated guidance will support charities and donors, giving clarity and reassurance around the rules and making it clear that the honest majority of donors and charities will remain unaffected by these reforms.
Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the proposal to require charities to spend gifts from wills within a set timeframe in the draft Finance Bill 2025-26 on legacy giving.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Charities rightly enjoy generous tax reliefs. However, a small number of charities are receiving tax relief in ways that were not intended by Parliament. Charity tax rules are being strengthened to improve HMRC’s ability to challenge abusive arrangements in an appropriate and proportionate way.
The new charity rules in the Finance Bill 2025-26 for legacy giving will ensure a charity uses tax relieved income for its charitable purposes. They will not require charities to spend gifts from wills within a set timeframe.
The new rules will replace the current purpose test with an outcome test. This will better prevent the abuse of tax reliefs through arrangements designed to give financial advantages to donors in return for their donation.
Updated guidance will support charities and donors, giving clarity and reassurance around the rules and making it clear that the honest majority of donors and charities will remain unaffected by these reforms.
Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the Loan Charge on the mental health of those affected; and if she will take steps to prevent such harm.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government commissioned an independent review of the loan charge to help bring the matter to a close for those affected whilst ensuring fairness for all taxpayers. The Government will respond by Autumn Budget 2025.
The independent review was led by Ray McCann whose name was suggested by one of the Loan Charge campaigners. The terms of reference made it clear that he would be supported by a team of officials based outside of HM Treasury and HMRC, none of whom had previously worked on this policy area. Mr McCann was responsible for deciding how to conduct the review and will also have the final say on what is included in his report.
HMRC has guidance and training in place for customer advisors on identifying people who need extra support and providing reasonable adjustments to meet their needs. HMRC can offer support to individuals with disguised remuneration liabilities through manageable payment plans and its well-established Extra Support Service.
Where appropriate, HMRC will signpost people to relevant voluntary and community organisations and where needed, to a dedicated Samaritans helpline for specialist emotional support where people can talk though any concerns or worries.
Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to ensure that the review of the Loan Charge is (a) independent, (b) transparent, (c) robust and (d) free from interference.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government commissioned an independent review of the loan charge to help bring the matter to a close for those affected whilst ensuring fairness for all taxpayers. The Government will respond by Autumn Budget 2025.
The independent review was led by Ray McCann whose name was suggested by one of the Loan Charge campaigners. The terms of reference made it clear that he would be supported by a team of officials based outside of HM Treasury and HMRC, none of whom had previously worked on this policy area. Mr McCann was responsible for deciding how to conduct the review and will also have the final say on what is included in his report.
HMRC has guidance and training in place for customer advisors on identifying people who need extra support and providing reasonable adjustments to meet their needs. HMRC can offer support to individuals with disguised remuneration liabilities through manageable payment plans and its well-established Extra Support Service.
Where appropriate, HMRC will signpost people to relevant voluntary and community organisations and where needed, to a dedicated Samaritans helpline for specialist emotional support where people can talk though any concerns or worries.
Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of reducing the annual Cash ISA allowance on older savers.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
ISAs incentivise saving and investment for future goals by providing tax advantages to individual taxpayers. The Government recognises the important role that cash savings play in helping households build a financial buffer for a rainy day. The Government continues to consider reforms to ISAs and savings to achieve the right balance between cash savings and investment and ensure better outcomes for both savers and the UK economy.
Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether it is her policy to retain the fair and reasonable remit of the Financial Ombudsman Service, in the context of fraud complaints.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
The Financial Ombudsman Service (FOS) plays an important role in providing consumers with a cost-free and quick route to resolve disputes with financial services firms.
My recent review of the FOS concluded that the framework in which it operates has resulted in it acting as a quasi-regulator in a small but significant minority of cases. That is why, as part of the Leeds Reforms, the Chancellor announced the most significant package of reforms to the FOS since its inception.
The review concluded that the ‘fair and reasonable’ test should be retained and adapted, to align it with the overall regulatory approach for financial services and provide greater predictability and consistency to consumers and firms. The government is currently consulting on proposed legislation to adapt the ‘fair and reasonable’ test to make clear that, where conduct complained of is in scope of FCA rules, compliance with those rules will mean that a firm has acted fairly and reasonably. It also proposes a mechanism for the FOS to refer a case to the FCA where there is ambiguity about FCA rules, to request a view on how its rules are intended to be applied, to ensure consistent application of regulatory standards by the FOS.
Regarding fraud, victims of fraud who wish to make a complaint about their financial services provider will continue to be able to bring complaints to the FOS, and the proposed changes to the legislative framework under which the FOS operates will not affect the FOS’s role in handling these complaints.
Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the adequacy of the transparency of business bank account fees.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
The Government recognises the importance of transparency in business bank account fees, enabling businesses to make informed choices when selecting banking services. It is important that businesses shop around for their banking needs as this drives competition, improves choice and helps keep prices competitive.
There are a number of policies that help facilitate this: small businesses with fewer than 50 employees and an annual turnover of less than £6.5m are able to use the current account switch service – designed to make it easier to shop around for their business current account.
The Financial Conduct Authority, as the independent regulator, sets requirements for banks to ensure that fees and charges are communicated clearly and fairly to customers, where such activity falls within its regulatory remit.
Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to ensure that SMEs (a) are not misled by banks (b) are not unfairly charged and (c) can access the financial services they need.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
The Government recognises the vital role that financial services play in supporting millions of SMEs across the UK. We are committed to ensuring that SMEs are treated fairly by banks and have access to the financial services they need.
The provision of business banking services is largely a commercial matter, but there are certain regulatory and statutory protections afforded to SMEs. Notably, Consumer Credit Act protections apply to certain small businesses (sole traders, unincorporated bodies and two or three person partnerships). The FCA is able to investigate issues where this falls within their regulatory remit and the application of the Consumer Duty to micro-enterprises.
In addition, the Financial Ombudsman Service has jurisdiction over 99% of business banking disputes, providing a wide safety-net for businesses and an important avenue for redress if SMEs feel they have been misled, unfairly charged or mistreated.
Earlier this year, the Government also legislated to strengthen customer protection standards in cases where banks and other payment service providers close accounts or terminate services. As a result, under the new requirements, both personal and business customers will be given more notice of closures and will be entitled to a sufficient explanation for their provider’s actions.
More widely, the Government is committed to encouraging competition in financial services to help stimulate a strong and diverse market for SMEs and improve access to finance. While we continue to monitor issues relating to accessing financial services, service provision and charging models remain commercial matters for individual firms.
Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential merits of reducing employer National Insurance contributions for employees returning to work after a year or more of unemployment.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
There are a wide range of factors to take into consideration when introducing a tax relief. These include how effective the relief would be at achieving the policy intent, how targeted support would be, whether it adds complexity to the tax system, and the cost.
The Government is committed to providing people who are out of work with the personalised support they need to find work, aiding the long-term ambition of an 80% employment rate. At the Spending Review, the Government increased funding for employment support to over £3.5 billion by 2028-29, helping people to access the skills they need to progress, tackling unemployment and inactivity and ensuring more people are in better jobs.
Asked by: Nadia Whittome (Labour - Nottingham East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to ensure that HMRC processes tax refunds within a (a) reasonable and (b) transparent timeframe.
Answered by James Murray - Chief Secretary to the Treasury
HMRC recognises that tax refunds are important for customers, and aims to process repayments as a priority.
HMRC’s correspondence service standard is to respond to 80% of priority post within 15 working days.
Monthly performance against this standard is published at https://www.gov.uk/government/collections/hmrc-monthly-performance-reports
HMRC’s online services include a ‘Where’s my reply’ tool which provides estimated response times. The tool is available here: https://www.gov.uk/guidance/check-when-you-can-expect-a-reply-from-hmrc