Oral Answers to Questions

Nigel Huddleston Excerpts

Tuesday 19th December 2023 Commons Chamber

[Paul Holmes (Eastleigh) (Con)]

4. What fiscal steps his Department is taking to support small businesses.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

A very jolly Christmas to you and all, Mr Speaker.

Small and medium-sized enterprises are the backbone of the economy, and we support them to thrive using levers across government. Our small business rate relief means that one third of business properties in England already pay no business rates. We provide tax reliefs benefiting SMEs, such as annual investment allowance and employment allowance, we support investments in SMEs through the British Business Bank programmes and we fund the schemes offering SMEs training and advice.

[Paul Holmes]

Merry Christmas to you and yours, Mr Speaker. The autumn statement was a huge success for small businesses across the country, with the Federation of Small Businesses describing it as “a game changer”. Will my hon. Friend outline to the House how the autumn statement package will benefit those small businesses in my constituency on which my towns and villages rely?

[Nigel Huddleston]

I thank my hon. Friend for his continuing support for small businesses in his constituency. Measures in the autumn statement to help them include extending the retail, hospitality and leisure relief for another year, which will support around 230,000 properties in England. That tax cut is worth nearly £2.4 billion. Meanwhile, by freezing the small business multiplier for a fourth consecutive year, we will be protecting more than a million properties from a multiplier increase. Other announcements that could benefit his constituents include the Help to Grow, management and Made Smarter programmes and moves to tackle late payments.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

The new 55-day payment rule will apply to only a few hundred companies contracted by the Government, yet microbusinesses, which do not typically have Government contracts, wait on average 68 days for payments. Those businesses make up the majority of small businesses across our country. Why will the Government not back the Micro Business Alliance’s “Pay in 30 days” campaign?

[Nigel Huddleston]

As I mentioned, we are well aware of the issue of late payments, and we are in constant dialogue with the key stakeholders in this area, as well as colleagues at the Department for Business and Trade. We will always keep an eye on the measures, but the moves we have already made to tackle late payments, as announced recently, will make a big difference.

[Mr Louie French (Old Bexley and Sidcup) (Con)]

5. What steps his Department is taking to reduce taxes.

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[Selaine Saxby (North Devon) (Con)]

9. Whether his Department is taking fiscal steps to reduce differences in the levels of taxation between long and short-term lets.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

The Government provide a different income tax regime for short-term lets compared with long-term lets if they qualify as furnished holiday lets, for which there are stringent conditions. As with all aspects of the tax system, the Government keep the tax treatment of property landlords under review. Any decisions on future changes will be taken by the Chancellor in the context of wider public finances.

[Selaine Saxby]

The changes to landlord tax relief, which fully came in during the pandemic, exclude holiday lets. That has contributed to a significant decline in residential landlords in tourist areas like North Devon. The lack of affordable rental properties has priced out workers, particularly in the hospitality sector, resulting in businesses reducing their opening hours and therefore their tax contribution to the Treasury. Can my hon. Friend provide any hope of levelling the tax playing field to encourage long-term landlords back to the market?

[Nigel Huddleston]

I thank my hon. Friend for her continued interest in this area on behalf of her constituents. The Government want to ensure a diverse and sustainable visitor accommodation offer while protecting local communities, including ensuring the availability of affordable housing to rent or to buy. That is why we are introducing a registration scheme for short-term lets in England, which will be a vital step towards achieving that aim. The Government keep the tax treatment of property landlords under review, but I would be happy to meet her to discuss these issues further.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Throughout Westmorland and Lonsdale we see people, particularly in social care, hospitality and tourism, ejected from their communities because of the collapse in the long-term rental market into a short-term rental market, principally through Airbnb. Will the Minister go further on fiscal controls to make sure that we keep homes available for local people to live in? Will he put pressure on ministerial colleagues to change planning law to make short-term lets a separate category of planning use, so that communities in the lakes and the dales can prevent the collapse of their communities into places only for those who can afford to visit?

[Nigel Huddleston]

I thank the hon. Gentleman for his comments. We have talked about this topic in my previous roles over many years. He is aware that the Department for Levelling Up, Housing and Communities has published a consultation on the introduction of a planning use class for short-term lets. He will also be aware that, through the Levelling Up and Regeneration Act 2023, the Government have introduced a new power to allow councils to apply a council tax premium on second homes. There is progress in this area, but we are always open to new ideas.

[Jessica Morden (Newport East) (Lab)]

10. What recent discussions he has had with the Financial Conduct Authority on how creditors contact customers in debt.

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[Greg Smith (Buckingham) (Con)]

T3.   I am hearing from a concerning number of small businesses in my constituency that they are slowing down as they approach the VAT threshold, rather than doing what the whole economy needs them to do and going for growth. Ahead of the spring Budget, will my right hon. Friend look at substantially shifting the VAT threshold upwards?

[The Financial Secretary to the Treasury (Nigel Huddleston)]

My hon. Friend is a great advocate for small businesses. The Government recognise that accounting for VAT can be a burden on businesses, but that is why, at £85,000, the UK has a higher VAT registration threshold than any EU member state and the second highest in the OECD, keeping the majority of UK businesses out of VAT altogether. In the 2022 autumn statement, it was announced that the VAT threshold would be maintained at its current level until 31 March 2026. As always, the Government keep taxes under review.

[Sir Stephen Timms (East Ham) (Lab)]

T2. I echo the Chancellor’s generous and well-judged tribute to Alistair Darling. At the autumn statement, the Chancellor said—mistakenly, as it turned out—that the household support fund was being extended into the next financial year; the Chief Secretary to the Treasury clarified the position a few moments ago. Does the Chancellor recognise that there is a compelling case for him to announce exactly that extension in the Budget, so that councils can continue to provide the last-resort safety net that has been such a valuable feature of the household support fund over the last three years?

--- Later in debate ---

[Nigel Huddleston]

I thank my hon. Friend the Chair of the Treasury Committee for raising this issue with me. We want to ensure that people can be served accurately and effectively through the most efficient channels. Two thirds of calls to the self-assessment line could be resolved online, through other channels—I highly recommend the app, for example. Last year, HMRC received over 3 million calls on three issues—resetting a password, getting a tax code and getting a national insurance number—that could easily be resolved digitally. People will still be able to call in, but we need to redeploy resources away from very simple questions towards those most in need, which will help those who are digitally unaware.

[Janet Daby (Lewisham East) (Lab)]

T5.   Mr Speaker, I wish you, your staff and everyone across the House a very happy Christmas. It has been reported that the Prime Minister instructed a £40 million VIP helicopter service that had been earmarked for closure to continue to provide him with flights. Will the Treasury publish a cost-benefit analysis of that decision for taxpayers to see?

--- Later in debate ---

[Mr David Davis (Haltemprice and Howden) (Con)]

A fortnight ago, Kaye Adams, a TV presenter, won her case against His Majesty’s Revenue and Customs on IR35 status. Despite the fact that she won her first tax tribunal on the issue, HMRC took her to either a tribunal or court four times over a nine-year period, forcing her to spend £200,000 in legal fees. HMRC spent many times that, using two King’s counsel at the last hearing alone. This was over a net tax bill of £70,000. There is no conceivable economic case for that. What HMRC is trying to do is move the guidelines by coercing Ms Adams and using her as an example to intimidate other self-employed workers to give in to HMRC’s bullying. This is a disgrace. It has gone on for too long. The 2021 revisions were inadequate and ministerial oversight is too weak. When will the Government review IR35 and, ideally, abolish it?

[Nigel Huddleston]

It is our duty to ensure that everyone pays the right tax under the law regardless of wealth or status. We note the decision of the tribunal and will carefully analyse the outcome before considering the next steps, but the off-payroll rules ensure that people who work like employees, but through their own limited company, are taxed like employees, creating a level playing field for other workers.

[Dave Doogan (Angus) (SNP)]

UK capital requirement regulations mandate a 50% level of capitalisation to be held by lenders for longer terms as opposed to 20% for shorter terms. Car manufacturer banks, such as Renault’s RCI Financial Services, underpin every franchise car dealer across these islands and operate on a seven-day notice period to terminate in order to minimise their capital requirements at 20%. The problem arises when a bank such as RCI maladministers a serious activity report, panics over its obligations under the regulations and terminates an award-winning Renault, Nissan and Dacia dealer such as Mackie Motors in my constituency with seven days’ notice. Will the Chancellor or one of his Ministers meet me to discuss this crisis?