Asked by: Sarah Bool (Conservative - South Northamptonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the British Hair Council's report entitled Securing the future of UK hairdressing and beauty: the economic, fiscal & societal case for VAT reform, published in February 2025, whether she has made an assessment of the potential economic benefits of reducing the VAT rate to ten per cent for labour-based services .
Answered by James Murray - Exchequer Secretary (HM Treasury)
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is also the UK’s second largest tax, forecast to raise £180 billion in 2025/26.
Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
Asked by: Sarah Bool (Conservative - South Northamptonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the implications for her policies of the report entitled Avoiding the Cliff Edge: Considering possible options for a VAT threshold smoothing mechanism, published on 9 January 2024.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Government will continue to bear in mind businesses’ views of this threshold. At £90,000, the UK has a higher VAT registration threshold than any EU Member State and the second highest in the OECD. This keeps the majority of UK businesses out of VAT altogether. The Government will continue to bear in mind businesses’ views of this threshold.
Asked by: Sarah Bool (Conservative - South Northamptonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will conduct a review of the VAT system as it applies to (a) the hair and beauty sector and (b) other labour-intensive industries.
Answered by James Murray - Exchequer Secretary (HM Treasury)
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is also the UK’s second largest tax, forecast to raise £180 billion in 2025/26.
Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
Asked by: Sarah Bool (Conservative - South Northamptonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of VAT on the financial sustainability of hair and beauty salons.
Answered by James Murray - Exchequer Secretary (HM Treasury)
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is also the UK’s second largest tax, forecast to raise £180 billion in 2025/26.
Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
Asked by: Sarah Bool (Conservative - South Northamptonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of reducing VAT rate on hair and beauty salons.
Answered by James Murray - Exchequer Secretary (HM Treasury)
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is also the UK’s second largest tax, forecast to raise £180 billion in 2025/26.
Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.