Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of introducing an alternative tax arrangement for payments made by employers to help support their employees with increases in the cost of living.

The Government understands that people across the UK are worried about the cost of living, and has taken decisive action to get households and businesses through this winter and the next.

Introducing a tax relief on bonuses or discretionary payments could risk tax avoidance in circumstances where individuals are able to set artificially low contracted hours in order to benefit from additional tax-free payments.

The Government remains committed to managing the public finances in a disciplined and responsible way by targeting support where it is most needed. Tax reliefs are difficult to target in this way; they are of greatest benefit to those paying higher rates of tax while low-earning individuals benefit less or not at all.