Asked by: Neil O'Brien (Conservative - Harborough, Oadby and Wigston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many staff in (a) her Department and (b) HMRC have job titles that include the words (i) equality, (ii) diversity, (iii) inclusion, (iv) gender, (v) LGBT and (vi) race.
Answered by James Murray - Exchequer Secretary (HM Treasury)
HM Treasury has a headcount of 2 staff who have (i) equality, (ii) diversity, (iii) inclusion, (iv) gender, (v) LGBT or (vi) race in their job title.
HMRC has a headcount of 12 staff who have (i) equality, (ii) diversity, (iii) inclusion, (iv) gender, (v) LGBT and (vi) race in their job title
Asked by: Neil O'Brien (Conservative - Harborough, Oadby and Wigston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how private schools who were not previously VAT-registered but did produce taxable supplies that were under the registration threshold will be treated under the new VAT guidance.
Answered by James Murray - Exchequer Secretary (HM Treasury)
A private school, or any other business, making taxable supplies under the threshold has no requirement to register for VAT. Once the value of taxable supplies made exceeds the VAT registration threshold, which currently stands at £90,000, they must register for VAT.
On 1 January 2025 supplies of education by private schools become subject to VAT at the standard rate of 20%. These fees must be included with the value of all other taxable supplies in calculating taxable turnover.
If the taxable turnover of a private school now exceeds the threshold, either due to supplies of education alone or a mix of education with other taxable supplies, they must register for VAT. This requirement extends to any person over the threshold and to taxable supplies of any nature.
The change in legislation and new guidance applies only to supplies of education by a private school and does not affect other taxable supplies.
Asked by: Neil O'Brien (Conservative - Harborough, Oadby and Wigston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, for what reason the publication of new VAT guidance in October 2024 was following the Budget.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Since 1 January 2025, all education services and vocational training provided by private schools in the UK for a charge have been subject to VAT at the standard rate of 20 per cent.
Since the announcement of this policy, HMRC has taken action to support private schools through the change.
On 10 October 2024, HMRC published bespoke guidance for private schools, which can be found here: Registering for VAT and Charging and Reclaiming VAT. HMRC published initial guidance ahead of the Budget to maximise the amount of time private schools had to prepare for this policy taking effect. This guidance was updated on 30 October 2024 to reflect the final policy design. Details of guidance updates are available on GOV.UK.
As with all guidance, HMRC is keeping the guidance for private schools under review. HMRC continues to engage with private schools and the organisations that represent them.
Asked by: Neil O'Brien (Conservative - Harborough, Oadby and Wigston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether independent schools under the new interpretation of VAT entities following the Autumn Budget 2024 are their own class of business.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Taxpayers who are required to register for VAT can usually do so online.
The ‘Business activity’ section of the VAT registration form requires a full description of all the taxpayer’s business activities, including the type of goods and/or services that they supply. HMRC guidance is for private schools to enter ‘Private Education Provider’ in this section.
When registering for VAT, taxpayers are also required to provide Standard Industry Classification (SIC) codes that best describe their business activities. These will depend on their individual circumstances.
Asked by: Neil O'Brien (Conservative - Harborough, Oadby and Wigston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the new VAT legislation for private schools led to HMRC amending or redefining the scope of input tax recovery for business who made exempt supplies prior to registration.
Answered by James Murray - Exchequer Secretary (HM Treasury)
VAT incurred prior to registration is not input tax. However, HMRC has discretion under the provisions of Regulation 111 of the VAT Regulations 1995 (SI 1995/2518) to allow such VAT to be treated as input tax, subject to the normal rules. There was therefore no need to amend or redefine the scope of input tax recovery following the introduction of VAT on private school fees.
Asked by: Neil O'Brien (Conservative - Harborough, Oadby and Wigston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the compatibility of changes to VAT legislation with the principal of fiscal neutrality.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Fiscal neutrality is a key feature of the VAT system, and helps to ensure market distortions are minimised by equalising the tax treatment of supplies which are identical or sufficiently similar from the point of view of the consumer.
When changing VAT legislation the Government considers issues of fiscal neutrality as part of the policy making process.
Asked by: Neil O'Brien (Conservative - Harborough, Oadby and Wigston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the comments of the Chief Secretary to the Treasury on Newsnight on 29 July 2024, what the evidential basis is for the claim that the Government Communication Service spent hundreds of millions of pounds on filming content for Conservative ministers’ social media channels.
Answered by Darren Jones - Chief Secretary to the Treasury
The government has taken decisive action to reduce wasteful spend, In Fixing the Foundations, the Chancellor identified £100m of savings from non-essential spending on government communications across 2024-25 and 2025-26.
Cabinet Office provided estimates of comms spending during the Public Spending Audit, announced by the Chancellor of the Exchequer in July 2024. Estimates were based on internal Government Communication Service data on campaigns planned by Departments and arm's length bodies at the time of commissioning. These indicate that UK Government was expected to spend £449m on communications campaigns during 24/25. This includes communications considered operationally critical, for example, required to fulfil a statutory duty, life-saving, or required for the efficient functioning of a public service. At Autumn Budget 2024, the Chancellor announced that the Government Communications Service is expecting to save £50m in 2024-25 and £85 million from reducing unnecessary communications spend in 2025-26 – exceeding the £100 million target set out in July.
Asked by: Neil O'Brien (Conservative - Harborough, Oadby and Wigston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the consultation entitled Technical consultation - Inheritance Tax on pensions: liability, reporting and payment, published on 30 October 2024, if she will make an estimate of how much tax revenue will be raised following the extension of inheritance tax on death-in-service payments for military families in each of the next five years.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The costing for including inheritable pension wealth in the value of the estate for inheritance tax purposes from April 2027 was certified by the OBR at the 2024 Autumn Budget as ‘reasonable and central’. Additional information on the costing methodology can be found in the OBR’s Economic and fiscal outlook – CP 1169.
The specific revenue raised as part of this costing from the extension of inheritance tax to death-in-service payments for military families in each of the next five years is not available as the data does not distinguish whether a taxpayer is or was a member of the Armed Forces.
Estates of service personnel will benefit from the normal nil-rate bands, reliefs, and exemptions available. For example, the nil-rate bands mean an estate can pass on up to £1 million and the general rules mean any transfers, including the payment of death benefits, to a spouse or civil partner are exempt fully from inheritance tax. There is also a full exemption from inheritance tax when a member of the armed forces dies from a wound inflicted, accident occurring, or disease contracted on active service.
Asked by: Neil O'Brien (Conservative - Harborough, Oadby and Wigston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate she has made of personal remittances from the United Kingdom in each of the last five years, broken down by region.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Remittances from the United Kingdom to other countries are not taxable, as such HMRC does not hold this data.
Asked by: Neil O'Brien (Conservative - Harborough, Oadby and Wigston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether pupils receiving dance and drama award funding will be exempt from increases in VAT in (a) this academic year and (b) subsequent financial years.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Performing arts schools that offer full-time education to children of compulsory school age and/or 16-19 year olds for a charge are in scope of the application of VAT to private school fees. This is to ensure fairness and consistency across all schools that provide education services and vocational training for a charge. It is the government’s position, therefore, that carving these schools out of the policy would be unfair to other private schools.
The Department for Education provides means-tested bursaries for eligible families as part of the Music and Dance Scheme (MDS) if their child has a place at any one of eight MDS performing arts private schools. For this academic year 2024/25, lower income families will receive additional support to ensure the total cost of their parental contributions do not rise from January 2025 as a result of the VAT change. This means that almost half of eligible families will be receiving further support in addition to the bursary already provided.
As part of the MDS, the Department also provides a grant to the Choir Schools Association (CSA) for their Choir Schools Scholarship Scheme. This scheme provides means-tested support to choristers attending CSA member schools. Whether member schools charge VAT from 1 January 2025 on their education fee will vary, depending on whether schools are private or state-funded.