Finance (No. 2) Bill (First sitting)

Oliver Ryan Excerpts

Tuesday 27th January 2026 Public Bill Committees

[Mark Garnier]

Clause 20 will introduce specific exemptions for minor expenses incurred by an employee on behalf of their employer. The Opposition particularly welcome subsections (3) to (6). As the Institute of Chartered Accountants in England and Wales says, it is a positive step that focuses on prevention rather than cures. It is also about the trade-off between tax relief and reduced future healthcare spending.

As the Association of Taxation Technicians has asked, will the Minister consider whether the covid-19 vaccination could be included in this provision? The Government’s explanatory notes state that corresponding changes to NICs for influenza vaccines and homeworking equipment will be made through separate regulations. Will the Minister provide more detail on when we can expect those regulations to be introduced?

On clause 21, the Government’s policy paper suggests that there will be no direct impact on business. However, there may be an indirect impact, as employers feel pressured to change their policies on reimbursement. As the Chartered Institute of Taxation points out:

“This creates an uneven situation in which two employees with identical working arrangements and costs are treated differently for tax purposes solely on the basis of their employer’s reimbursement policy.”

It also seems to follow our party’s scepticism about solely remote working. During the passage of the Employment Rights Act 2025, the Government said repeatedly that the right to work from home boosts productivity. Clause 21 seems to go against that by making it more difficult to work from home. It also seems to be a further attack on private sector employees, despite the fact that in 2024 HMRC spent £82 million on remote working devices for its workers, while the Home Office spent £53 million. Is this another example of the Government hitting the private sector while protecting the public sector?

Clauses 22 and 23 confirm that payments received in Great Britain for cancelled, moved or curtailed shifts are subject to income tax. In the explanatory notes, the Government state that this would also allow for

“the introduction of regulations to ensure that payments are also subject to National Insurance contributions”.

We think it would help to provide fairness in the tax system to support the clarity that the clause provides, so can the Minister confirm when the Government will seek to introduce those specific changes?

More generally, I want to make a point that my hon. Friend the Member for Mid Buckinghamshire (Greg Smith) made on the Employment Rights Bill Committee. While the clause provides fairness in the system between employees, the Government are still providing little support for businesses if they have to cancel, move or curtail shifts in circumstances that are unexpected or out of their control. Will the Minister commit to working with her colleagues in the Department for Business and Trade to assess how they can better support businesses when such situations arise?

[Oliver Ryan (Burnley) (Lab/Co-op)]

As ever, Sir Roger, it is a pleasure to make a short contribution while you are in the Chair. On clause 20, I will not echo the point that has just been made, but the Minister will have seen the written evidence submitted by the Association of Taxation Technicians, which discussed potentially widening the new initiative of including flu vaccinations in expenditure deductible from employment income, so that it also includes covid vaccinations. Has the Minister given that any thought?

On clause 22, it is a pleasure to see the Employment Rights Act being enacted and to address shifts being missed by people on zero-hours contracts, such as those in my constituency. It probably takes us into a wider debate that the Opposition have raised about having oral evidence sessions. It is clear from the evidence pack that the Chartered Institute of Taxation, the Association of Taxation Technicians and other taxation professionals have quite a lot of comments to make. If submissions on the clause were opened to my constituents, I am sure that there would be mass evidence from the public saying how much of a good thing it is. Does the Minister have any comments on that?

[Mr Reynolds]

Clause 21 will increase unfairness. Those required to work from home are currently divided into two groups: one group who receive reimbursement for costs without incurring income tax but are not reimbursed by their employer, and another group who take that via a taxation route. This measure will exacerbate that split and create a greater divide between the two. Where two employees hold exactly the same position or role, but in different companies, one may receive the payment and the other may not. The figures suggest that about 300,000 people will be affected by this measure. Can the Minister comment on how we can be in a position whereby two employees in the same job, but with different employers, are treated differently for tax purposes?

--- Later in debate ---

[Oliver Ryan]

The Minister makes a very good point about the expansion of exemptions and the fact that the Government are minded to look at this in future Budgets. I welcome clause 29, which talks about the leasing of plants and machinery and affects many businesses in my constituency. I think it will have a genuine impact and, much as the Opposition might say, “This is a very good thing,” and welcome it, I hope they will vote with us today. However, the question has to be asked why, after 14 years in government, they did not bring this in. For various businesses in my constituency that lease large equipment, this would have made a massive difference. Unfortunately, it is being brought in by us later in the day because it was not done by the Conservatives.

[Lucy Rigby]

My hon. Friend makes a very good point.

The shadow Minister asked about working with businesses to get the word out. We have been working closely with industry on the expansion to leasing and we are consulting businesses on guidance to ensure that understanding of the new rules is as full as possible. The TIINs beloved of the shadow Minister, we now hear, make it clear that the OBR’s “Economic and fiscal outlook” sets out that the measure is not expected to have significant macroeconomic impacts, and for future investment the present value and cost of capital for businesses that claim the new first-year allowance remains broadly the same following these changes. For all those reasons, I maintain the view that new clause 2 should be rejected.

Question put and agreed to.

Clause 28 accordingly ordered to stand part of the Bill.

Clause 29 ordered to stand part of the Bill.