Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of planned changes to (a) income and (b) inheritance tax on people who inherit more than £1 million.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Inheritance tax is a wealth transfer tax charged on the estate (the property, money, and possessions) of someone who has died. In the latest available tax year (2021-22), 4.39% of all UK deaths were liable to inheritance tax.
The tax liability is on the estate and not the beneficiary of any inherited assets. As such, HMRC does not collect information on the beneficiaries of estates, as it has no reason to do so.
The Government announced several reforms to inheritance tax at Autumn Budget 2024. The Government’s analysis of these reforms is based on the number of estates expected to pay more inheritance tax. More information is available in the various policy papers published alongside the Budget: https://www.gov.uk/government/publications/autumn-budget-2024.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of threshold for the payment of Inheritance Tax on families with assets worth over £1 million.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Inheritance tax is a wealth transfer tax charged on the estate (the property, money, and possessions) of someone who has died. In the latest available tax year (2021-22), 4.39% of all UK deaths were liable to inheritance tax.
The tax liability is on the estate and not the beneficiary of any inherited assets. As such, HMRC does not collect information on the beneficiaries of estates, as it has no reason to do so.
The Government announced several reforms to inheritance tax at Autumn Budget 2024. The Government’s analysis of these reforms is based on the number of estates expected to pay more inheritance tax. More information is available in the various policy papers published alongside the Budget: https://www.gov.uk/government/publications/autumn-budget-2024.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps her Department is taking to help support small and medium sized enterprises with the cost of import charges.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Small and medium sized businesses make a vital contribution to the UK economy. There are various arrangements in place that enable businesses to access reduced or zero import charges.
With regards to customs duty, the UK has a number of free trade agreements which enable businesses to benefit from paying reduced or zero customs duty. The UK also has several customs procedures which allow businesses to pay a reduced amount of duty on their imports, depending on what they are and what they do with them – for example, if they are importing them temporarily or repairing them.
VAT is due on all imports of goods into the UK at the same rate as domestic transactions. This ensures imports cannot undercut UK businesses and does not represent an additional charge for businesses buying imports. VAT registered businesses are able to reclaim VAT paid upon import, in the same way as for domestic purchases, as well as making use of VAT accounting schemes to smooth cash flow.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the impact of the VAT (a) threshold and (b) rates on the (i) growth and (ii) financial sustainability of small businesses.
Answered by James Murray - Exchequer Secretary (HM Treasury)
At £90,000, the UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD. This keeps the majority of businesses out of the VAT regime altogether.
The Government’s approach to the VAT threshold and applicable rates aims to balance potential impacts on small businesses, including their growth and financial sustainability, the economy as a whole, and tax revenues. Tax breaks reduce the revenue available for public services and must represent value for money for the taxpayer.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will review the criteria for vehicle tax exemptions for disabled individuals (a) over the state pension age and (b) in receipt of Attendance Allowance.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Government is committed to supporting disabled people and is determined that support should be focused on people who need it most. The aim of existing Vehicle Excise Duty (VED) exemptions for recipients of some disability benefits is to provide additional help for people who become disabled early, or relatively early, in life and as a result experience economic disadvantage. These allowances are therefore only available to people who become disabled before State Pension age.
For individuals who develop a disability after State Pension age, Attendance Allowance (AA) is a non-means-tested benefit which provides targeted help with the extra costs of disability and helps them maintain their independence. Unlike Disability Living Allowance and Personal Independence Payment, AA does not have a mobility component and is intended to cover the need for care or supervision an individual requires as a result of their disability rather than specific mobility needs. Individuals can however choose to use their AA to fund mobility aids.
While we have no current plans to reform the VED exemptions for recipients of some disability benefits, the Government keeps all taxes under review as part of the policy making process, and the Chancellor makes decisions at fiscal events in the context of the public finances.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has made a comparative assessment of the potential impact of the proposed increase in employers National Insurance contributions on (a) small and medium businesses and (b) large businesses.
Answered by James Murray - Exchequer Secretary (HM Treasury)
A Tax Information and Impact Note that covers the employer NICs changes was published by HMRC on 13 November
The government has protected the smallest businesses from the impact of the increase to employers’ National Insurance by increasing the Employment Allowance from £5,000 to £10,500, which means that 865,000 employers will pay no employer NICs at all next year.
More than half of employers see no change or gain overall from this package and eligible employers will be able to employ up to four full-time workers on the National Living Wage and pay no employer NICs.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will extend Orchestra Tax Relief to choirs.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The creative industries play a key role in driving economic growth. The Government is committed to supporting them as part of its plan to fix the foundations of the economy.
Orchestra Tax Relief (OTR) provides tax relief at a rate of 50% on production costs. To qualify for the relief, a concert must be performed by a group of at least 12 instrumentalists. Concerts with a vocal element, including a choir, may be eligible provided that the instrumentalists are the primary focus.
These rules help ensure OTR fulfils its objective of supporting and incentivising orchestra concerts specifically. The Government keeps the tax system under review and any changes will be announced at a fiscal event.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will ensure that revenues generated by VAT on independent school fees are passed on proportionally to devolved Administrations in (a) Scotland, (b) Wales and (c) Northern Ireland.
Answered by James Murray - Exchequer Secretary (HM Treasury)
On 29 July, the Government announced that, as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20 per cent. This will also apply to boarding services provided by private schools.
The Government will confirm the introduction of these tax policy changes at the Budget on 30 October. Following scrutiny of the Government’s costing by the independent Office for Budget Responsibility, details of the Government’s assessment of the expected impacts of these policy changes will be published at the Budget in the usual way.
These changes will apply across the UK. The Barnett formula will continue to apply in the usual way as set out in the Statement of Funding Policy.
Asked by: Susan Murray (Liberal Democrat - Mid Dunbartonshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of applying VAT to independent school fees on the affordability of those fees.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Government is committed to breaking down barriers to opportunity, ensuring every child has access to high-quality education, which is why we have made the tough decision to end tax breaks for private schools. This will raise revenue for essential public services, including investing in the state education system
This VAT change will not impact pupils with most acute additional needs where these can only be met in private schools, as determined by an Education and Health Care Plan in England, and equivalent processes in other nations.
Where pupils are placed in a private school because their needs cannot be met in the state sector, and they have their places funded by their Local Authority, the Local Authority will be able to reclaim the VAT they incur on these pupils’ fees. In Northern Ireland, it will be the Education Authority who fund placements in private schools and will be able to reclaim the VAT in this way.
The government will publish a Tax Information and Impact Note setting out the impacts of the changes, including the equalities impacts, alongside the Finance Bill.