Asked by: Suella Braverman (Conservative - Fareham and Waterlooville)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department plans to take steps to amend the VAT threshold structure to support small employers in the (a) hospitality and (b) personal care sector.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
With a VAT registration threshold of £90,000, the UK’s threshold is higher than any EU country and the joint highest in the OECD.
The Government’s approach to the VAT threshold aims to balance potential impacts on small businesses, including their growth and financial sustainability, the economy as a whole, and tax revenues.
Asked by: Suella Braverman (Conservative - Fareham and Waterlooville)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she will assess the potential merits of only applying VAT to turnover above £90,000 for small businesses.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
With a VAT registration threshold of £90,000, the UK’s threshold is higher than any EU country and the joint highest in the OECD.
The Government’s approach to the VAT threshold aims to balance potential impacts on small businesses, including their growth and financial sustainability, the economy as a whole, and tax revenues.
Asked by: Suella Braverman (Conservative - Fareham and Waterlooville)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the impact of the VAT threshold on small businesses with turnover between £90,000 and £150,000; and if she will make it her policy to introduce a staggered VAT model to reduce disincentives to growth.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
With a VAT registration threshold of £90,000, the UK’s threshold is higher than any EU country and the joint highest in the OECD.
The Government’s approach to the VAT threshold aims to balance potential impacts on small businesses, including their growth and financial sustainability, the economy as a whole, and tax revenues.
Asked by: Suella Braverman (Conservative - Fareham and Waterlooville)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an estimate of the number of small businesses that have limited their (a) turnover and (b) expansion plans to avoid exceeding the VAT threshold.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
With a VAT registration threshold of £90,000, the UK’s threshold is higher than any EU country and the joint highest in the OECD.
The Government’s approach to the VAT threshold aims to balance potential impacts on small businesses, including their growth and financial sustainability, the economy as a whole, and tax revenues.
Asked by: Suella Braverman (Conservative - Fareham and Waterlooville)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of inheritance tax on the viability of intergenerational farming businesses.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Ministers from several Government departments have met with various representative organisations to discuss the reforms to agricultural property relief and business property relief. These discussions have involved the National Farmers’ Union, the Tenant Farmers’ Association, the Country Land and Business Association, the Central Association of Agricultural Valuers, the Ulster Farmers’ Union, NFU Cymru, NFU Scotland and the Farmers’ Union of Wales.
The Government believes its reforms to agricultural property relief and business property relief from 6 April 2026 get the balance right between supporting farms and businesses, and fixing the public finances. The reforms reduce the inheritance tax advantages available to owners of agricultural and business assets, but still mean those assets will be taxed at a much lower effective rate than most other assets. Despite a tough fiscal context, the Government will maintain very significant levels of relief from inheritance tax beyond what is available to others and compared to the position before 1992. Where inheritance tax is due, those liable for a charge can pay any liability on the relevant assets over 10 annual instalments, interest-free.
The Government has set out that the reforms are expected to result in up to 520 estates across the UK claiming agricultural property relief, including those also claiming business property relief, paying more inheritance tax in 2026-27. Almost three-quarters of estates claiming agricultural property relief, including those that also claim for business property relief, will not pay any more tax as a result of the changes in 2026-27, based on the latest available data.
The recent report by the independent Centre for the Analysis of Taxation (CenTax) supports the Government’s analysis of these reforms, including the number of estates affected in 2026-27, and concludes that half of these estates will see an increase in their effective inheritance tax rate of less than 5 percentage points, and almost 90 per cent of these estates could pay their entire inheritance tax bill out of non-farm assets.
The Government published a tax information and impact note on 21 July 2025 and this is available at www.gov.uk/government/publications/reforms-to-agricultural-property-relief-and-business-property-relief/agricultural-property-relief-and-business-property-relief-reforms.
The Government will invest more than £2.7 billion a year in sustainable farming and nature recovery from 2026-27 until 2028-29. This includes the largest financial investment into nature-friendly farming ever.
Asked by: Suella Braverman (Conservative - Fareham and Waterlooville)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department plans to review the (a) scope and (b) application of Agricultural Property Relief in the context of the requirements of modern farming.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Ministers from several Government departments have met with various representative organisations to discuss the reforms to agricultural property relief and business property relief. These discussions have involved the National Farmers’ Union, the Tenant Farmers’ Association, the Country Land and Business Association, the Central Association of Agricultural Valuers, the Ulster Farmers’ Union, NFU Cymru, NFU Scotland and the Farmers’ Union of Wales.
The Government believes its reforms to agricultural property relief and business property relief from 6 April 2026 get the balance right between supporting farms and businesses, and fixing the public finances. The reforms reduce the inheritance tax advantages available to owners of agricultural and business assets, but still mean those assets will be taxed at a much lower effective rate than most other assets. Despite a tough fiscal context, the Government will maintain very significant levels of relief from inheritance tax beyond what is available to others and compared to the position before 1992. Where inheritance tax is due, those liable for a charge can pay any liability on the relevant assets over 10 annual instalments, interest-free.
The Government has set out that the reforms are expected to result in up to 520 estates across the UK claiming agricultural property relief, including those also claiming business property relief, paying more inheritance tax in 2026-27. Almost three-quarters of estates claiming agricultural property relief, including those that also claim for business property relief, will not pay any more tax as a result of the changes in 2026-27, based on the latest available data.
The recent report by the independent Centre for the Analysis of Taxation (CenTax) supports the Government’s analysis of these reforms, including the number of estates affected in 2026-27, and concludes that half of these estates will see an increase in their effective inheritance tax rate of less than 5 percentage points, and almost 90 per cent of these estates could pay their entire inheritance tax bill out of non-farm assets.
The Government published a tax information and impact note on 21 July 2025 and this is available at www.gov.uk/government/publications/reforms-to-agricultural-property-relief-and-business-property-relief/agricultural-property-relief-and-business-property-relief-reforms.
The Government will invest more than £2.7 billion a year in sustainable farming and nature recovery from 2026-27 until 2028-29. This includes the largest financial investment into nature-friendly farming ever.
Asked by: Suella Braverman (Conservative - Fareham and Waterlooville)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions her Department has had with farmers on the impact of (a) Agricultural Property Relief and (b) inheritance tax on succession planning for family farms.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Ministers from several Government departments have met with various representative organisations to discuss the reforms to agricultural property relief and business property relief. These discussions have involved the National Farmers’ Union, the Tenant Farmers’ Association, the Country Land and Business Association, the Central Association of Agricultural Valuers, the Ulster Farmers’ Union, NFU Cymru, NFU Scotland and the Farmers’ Union of Wales.
The Government believes its reforms to agricultural property relief and business property relief from 6 April 2026 get the balance right between supporting farms and businesses, and fixing the public finances. The reforms reduce the inheritance tax advantages available to owners of agricultural and business assets, but still mean those assets will be taxed at a much lower effective rate than most other assets. Despite a tough fiscal context, the Government will maintain very significant levels of relief from inheritance tax beyond what is available to others and compared to the position before 1992. Where inheritance tax is due, those liable for a charge can pay any liability on the relevant assets over 10 annual instalments, interest-free.
The Government has set out that the reforms are expected to result in up to 520 estates across the UK claiming agricultural property relief, including those also claiming business property relief, paying more inheritance tax in 2026-27. Almost three-quarters of estates claiming agricultural property relief, including those that also claim for business property relief, will not pay any more tax as a result of the changes in 2026-27, based on the latest available data.
The recent report by the independent Centre for the Analysis of Taxation (CenTax) supports the Government’s analysis of these reforms, including the number of estates affected in 2026-27, and concludes that half of these estates will see an increase in their effective inheritance tax rate of less than 5 percentage points, and almost 90 per cent of these estates could pay their entire inheritance tax bill out of non-farm assets.
The Government published a tax information and impact note on 21 July 2025 and this is available at www.gov.uk/government/publications/reforms-to-agricultural-property-relief-and-business-property-relief/agricultural-property-relief-and-business-property-relief-reforms.
The Government will invest more than £2.7 billion a year in sustainable farming and nature recovery from 2026-27 until 2028-29. This includes the largest financial investment into nature-friendly farming ever.
Asked by: Suella Braverman (Conservative - Fareham and Waterlooville)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department has made an assessment of the potential merits of introducing a reduced flat rate percentage for hospitality sector businesses.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Flat Rate Scheme aims to offer additional simplification to smaller businesses. It allows VAT to be calculated by the application of a sector-specific percentage. Users benefit by not having to account for VAT on sales and costs, instead applying a lower rate than the 20% Standard Rate of VAT.
These percentages reflect average ratios of VAT on sales and purchases for registered businesses in each sector. They vary between 4% and 16.5% to account for the different levels of normal input tax recovery. This includes the 10.5% hospitality rate.
Additionally, the Scheme allows businesses to recover VAT on the purchase of larger capital items.
We keep all taxes under review and make changes at Budget in the context of the overall public finances.
Asked by: Suella Braverman (Conservative - Fareham and Waterlooville)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she plans to review the Flat Rate Scheme rules to enable small hospitality businesses to recover VAT on essential inputs.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Flat Rate Scheme aims to offer additional simplification to smaller businesses. It allows VAT to be calculated by the application of a sector-specific percentage. Users benefit by not having to account for VAT on sales and costs, instead applying a lower rate than the 20% Standard Rate of VAT.
These percentages reflect average ratios of VAT on sales and purchases for registered businesses in each sector. They vary between 4% and 16.5% to account for the different levels of normal input tax recovery. This includes the 10.5% hospitality rate.
Additionally, the Scheme allows businesses to recover VAT on the purchase of larger capital items.
We keep all taxes under review and make changes at Budget in the context of the overall public finances.
Asked by: Suella Braverman (Conservative - Fareham and Waterlooville)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of the Flat Rate VAT Scheme on small independent hospitality businesses' ability to claim VAT on (a) food, (b) energy, (c) supplies and (d) other input costs.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Flat Rate Scheme offers additional simplification to smaller businesses. It allows VAT to be calculated by the application of a sector-specific percentage. These are lower than the current rate of 20% to allow for VAT on costs which cannot be claimed by scheme users.
These percentages reflect average ratios of VAT on sales and purchases for registered businesses in each sector. They vary between 4% and 16.5% to account for the different levels of normal VAT recovery. This includes the 10.5% hospitality rate. Additionally, the Scheme allows businesses to recover VAT on the purchase of larger capital items.
In this sector many costs do not attract VAT, including food which may be zero-rated and wages which are outside the scope of VAT. Energy costs may be charged a lower rate of VAT depending on usage.
The Flat Rate Scheme is optional, and each business must make its own judgement regarding the additional simplification it offers and the different VAT liability which would be declared if it were used.