HM Treasury is the government’s economic and finance ministry, maintaining control over public spending, setting the direction of the UK’s economic policy and working to achieve strong and sustainable economic growth.
This inquiry will examine quantitative tightening, including its impact on the economy and its fiscal costs. It will also investigate …
Oral Answers to Questions is a regularly scheduled appearance where the Secretary of State and junior minister will answer at the Dispatch Box questions from backbench MPs
Other Commons Chamber appearances can be:Westminster Hall debates are performed in response to backbench MPs or e-petitions asking for a Minister to address a detailed issue
Written Statements are made when a current event is not sufficiently significant to require an Oral Statement, but the House is required to be informed.
HM Treasury does not have Bills currently before Parliament
A Bill to Make provision to amend section 4 of the Social Security Contributions and Benefits Act 1992, and section 4 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992, so that amounts of salary sacrificed for employer pensions contributions pursuant to optional remuneration arrangements are liable to national insurance contributions.
This Bill received Royal Assent on 29th April 2026 and was enacted into law.
A Bill to make provision in connection with finance.
This Bill received Royal Assent on 18th March 2026 and was enacted into law.
A Bill to Authorise the use of resources for the years ending with 31 March 2025, 31 March 2026 and 31 March 2027; to authorise the issue of sums out of the Consolidated Fund for those years; and to appropriate the supply authorised by this Act for the years ending with 31 March 2025 and 31 March 2026.
This Bill received Royal Assent on 18th March 2026 and was enacted into law.
A Bill to Authorise the use of resources for the year ending with 31 March 2026; to authorise both the issue of sums out of the Consolidated Fund and the application of income for that year; and to appropriate the supply authorised for that year by this Act and by the Supply and Appropriation (Anticipation and Adjustments) Act 2025.
This Bill received Royal Assent on 21st July 2025 and was enacted into law.
A Bill to make provision about secondary Class 1 contributions.
This Bill received Royal Assent on 3rd April 2025 and was enacted into law.
A Bill to make provision about finance.
This Bill received Royal Assent on 20th March 2025 and was enacted into law.
A Bill to amend the Crown Estate Act 1961.
This Bill received Royal Assent on 11th March 2025 and was enacted into law.
A Bill to Authorise the use of resources for the years ending with 31 March 2024, 31 March 2025 and 31 March 2026; to authorise the issue of sums out of the Consolidated Fund for those years; and to appropriate the supply authorised by this Act for the years ending with 31 March 2024 and 31 March 2025.
This Bill received Royal Assent on 11th March 2025 and was enacted into law.
A Bill to make provision for loans or other financial assistance to be provided to, or for the benefit of, the government of Ukraine.
This Bill received Royal Assent on 16th January 2025 and was enacted into law.
A Bill to impose duties on the Treasury and the Office for Budget Responsibility in respect of the announcement of fiscally significant measures.
This Bill received Royal Assent on 10th September 2024 and was enacted into law.
A Bill to authorise the use of resources for the year ending with 31 March 2025; to authorise both the issue of sums out of the Consolidated Fund and the application of income for that year; and to appropriate the supply authorised for that year by this Act and by the Supply and Appropriation (Anticipation and Adjustments) Act 2024.
This Bill received Royal Assent on 30th July 2024 and was enacted into law.
e-Petitions are administered by Parliament and allow members of the public to express support for a particular issue.
If an e-petition reaches 10,000 signatures the Government will issue a written response.
If an e-petition reaches 100,000 signatures the petition becomes eligible for a Parliamentary debate (usually Monday 4.30pm in Westminster Hall).
Raise the income tax personal allowance from £12,570 to £20,000
Gov Responded - 20 Feb 2025 Debated on - 12 May 2025Raise the income tax personal allowance from £12570 to £20000. We think this would help low earners to get off benefits and allow pensioners a decent income.
Don't change inheritance tax relief for working farms
Gov Responded - 5 Dec 2024 Debated on - 10 Feb 2025We think that changing inheritance tax relief for agricultural land will devastate farms nationwide, forcing families to sell land and assets just to stay on their property. We urge the government to keep the current exemptions for working farms.
Don't apply VAT to independent school fees, or remove business rates relief.
Gov Responded - 20 Dec 2024 Debated on - 3 Mar 2025Prevent independent schools from having to pay VAT on fees and incurring business rates as a result of new legislation.
Commons Select Committees are a formally established cross-party group of backbench MPs tasked with holding a Government department to account.
At any time there will be number of ongoing investigations into the work of the Department, or issues which fall within the oversight of the Department. Witnesses can be summoned from within the Government and outside to assist in these inquiries.
Select Committee findings are reported to the Commons, printed, and published on the Parliament website. The government then usually has 60 days to reply to the committee's recommendations.
Under long-standing UK VAT law, some non-monetary transactions are treated as supplies to ensure a fair tax result where VAT has been recovered on costs. The application of VAT to medicines or treatments provided free of charge depends on the specific facts of each case. HMRC has applied this law consistently for many years and continues to do so fairly across all taxpayers.
Unincorporated landlords receive basic rate relief through a tax reduction. The estimated cost of basic rate tax relief on finance costs for landlords of residential properties reporting in Income Tax Self Assessment (ITSA) in 2023/24 (the latest available year) is £1.4 billion.
The Government takes the issue of fraud very seriously and is dedicated to protecting the public from this appalling crime.
In the National Payments Vision, the Government set out its ambitions for a trusted, world-leading payments ecosystem delivered on next-generation technology, where consumers and businesses have a choice of payment methods to meet their needs. As part of this, the Government set out its ambition for account-to-account payments to be developed as a ubiquitous payment method.
In November, the Payments Vision Delivery Committee published its strategy to guide the development of the future retail payments infrastructure. This includes setting as a strategic outcome that consumers and businesses can trust that their payments are protected from fraud and wider financial crime.
To achieve this and 'design out' financial crime, the future infrastructure must enable: advanced prevention, detection and resolution capabilities; robust authentication mechanisms; appropriate protection across payment methods; and secure and efficient data access and sharing.
The Retail Payments Infrastructure Board, chaired by the Bank of England and with representation from across the payments ecosystem, is working to translate this strategy into the design of the future infrastructure, in line with the Government’s vision.
Data from the latest UK House Price Index shows that while the average price paid by first-time buyers has increased, it is still below the LISA property price cap in all regions of the UK except for London, where the average price paid is affected by boroughs with very high property values.
The Government keeps all aspects of savings tax policy under review.
Data from the latest UK House Price Index shows that while the average price paid by first-time buyers has increased, it is still below the LISA property price cap in all regions of the UK except for London, where the average price paid is affected by boroughs with very high property values.
The Government keeps all aspects of savings tax policy under review.
HM Treasury fully recognises the important role Parliament has in holding Government to account and the need for ministers to provide full and timely responses to requests for information.
HM Treasury does not track average response times but in line with Cabinet Office guidance, aims to respond to ministerial correspondence from parliamentarians within 20 working days. Correspondence performance data is published each year within HM Treasury’s Annual Report and Accounts. The last published annual report and accounts is the 2024-25 Report which noted that 52% of replies to parliamentarians were answered within the timeframe.
The 2025-26 Annual Report and Accounts is expected to be published before the parliamentary recess. However, in 2025 the Cabinet Office published correspondence performance which confirms that 40% of replies were answered within the same timeframe Data on responses to correspondence from MPs and peers, 2025 - GOV.UK
The Government remains determined to ensure Russia is held accountable for the damage it has caused, and continues to cause, in Ukraine.
We will continue work and coordinate with G7 and EU partners to ensure that Ukraine gets the funding it needs, ensuring any options developed by the Government are in line with international law.
As the Prime Minister and the E3 reaffirmed in their joint statement on 7 June, the UK has pledged that Russia's sovereign assets will remain immobilised until they cease the war and pay compensation to Ukraine.
The Government is seeking views on the eligibility criteria under which homeowners might defer HVCTS liability in a consultation published on 29 May 2026. Numbers of homeowners eligible will depend on the final design of any deferral scheme.
The consultation can be found here: https://www.gov.uk/government/consultations/high-value-council-tax-surcharge/high-value-council-tax-surcharge
Estimates of the number of people reporting a gross property income of greater than £1,000 to HMRC for the latest available financial year are shown in the table below.
Tax Year | Category | No. of People Reporting Gross Property Income Greater Than £1,000 in 2023/24 (Rounded to the Nearest 1,000) (1) |
2023/24 | Individual | 2,887,000 |
2023/24 | Partnership | 33,000 |
(1) The figures include unincorporated landlords reporting total property rental income greater than £1,000, before any expenses and allowances deductions, via Income Tax Self Assessment (ITSA).
The Government is committed to improving economic growth and living standards across every part of the United Kingdom, including in communities affected by the long-term decline of industry. We are moving away from a model where growth is concentrated in a few places to one that unlocks investment in every region.
At the March 2026 Mais Lecture, the Chancellor set out plans to empower regional growth, including establishing City Investment Funds with an additional £2.3 billion of grant, loan and patient capital funding for major city regions, with up to £1.7 billion going directly to mayors in the North. Over £150 million will also be invested through the IS8 cluster (Industrial Strategy growth driving sectors) programme into five areas across the North and North East, backing growth-driving sectors where places already have strengths, to grow firms and create good local jobs. This builds on the £15.6 billion confirmed at the Spending Review for Transport for City Regions settlements, and the £5.8 billion being provided for deprived neighbourhoods across the UK through the Pride in Place Programme.
Alongside investment, the Government is tackling economic inactivity directly. We have announced further investment to unlock up to 200,000 new jobs and apprenticeship opportunities for young people, including a new Youth Jobs Grant and an expanded Jobs Guarantee, taking total investment in the Youth Guarantee and the Growth and Skills Levy to £2.5 billion over the next three years. Through the National Wealth Fund, the Government has invested £3.8 billion across a number of projects, creating or supporting 20,300 jobs in its first year.
Taken together, these measures are designed to raise investment, create more jobs and improve living standards in the places that have too often been left behind.
The Government is committed to improving economic growth and living standards across every part of the United Kingdom, including in communities affected by the long-term decline of industry. We are moving away from a model where growth is concentrated in a few places to one that unlocks investment in every region.
At the March 2026 Mais Lecture, the Chancellor set out plans to empower regional growth, including establishing City Investment Funds with an additional £2.3 billion of grant, loan and patient capital funding for major city regions, with up to £1.7 billion going directly to mayors in the North. Over £150 million will also be invested through the IS8 cluster (Industrial Strategy growth driving sectors) programme into five areas across the North and North East, backing growth-driving sectors where places already have strengths, to grow firms and create good local jobs. This builds on the £15.6 billion confirmed at the Spending Review for Transport for City Regions settlements, and the £5.8 billion being provided for deprived neighbourhoods across the UK through the Pride in Place Programme.
Alongside investment, the Government is tackling economic inactivity directly. We have announced further investment to unlock up to 200,000 new jobs and apprenticeship opportunities for young people, including a new Youth Jobs Grant and an expanded Jobs Guarantee, taking total investment in the Youth Guarantee and the Growth and Skills Levy to £2.5 billion over the next three years. Through the National Wealth Fund, the Government has invested £3.8 billion across a number of projects, creating or supporting 20,300 jobs in its first year.
Taken together, these measures are designed to raise investment, create more jobs and improve living standards in the places that have too often been left behind.
The Government is committed to supporting new parents and keeps relevant tax breaks and financial incentives under regular review.
Available support includes Child Benefit which provides weekly payments of £27.05 for eldest children and £17.90 for subsequent children, as well as a £500 one-off payment through the Sure Start Maternity Grant to help with the costs of having a child.
HM Treasury has not asked for, nor received, any advice from the ONS regarding the implications for ONS classification if Thames Water was taken into Special Administration.
The Government is committed to tackling fraud and protecting victims from this appalling crime. The Government has recently introduced a new and expanded Fraud Strategy and is determined to turn the tide on fraud and better protect the public and businesses.
Specific Direction 17 was issued by the independent Payment Systems Regulator in October 2022 under the Financial Services (Banking Reform) Act 2013. It requires certain payment service providers, including some participants in Faster Payments and CHAPS, to use Confirmation of Payee. This is a name-checking service designed to reduce certain types of authorised push payment fraud and accidentally misdirected payments.
As Specific Direction 17 is made and overseen by the independent Payment Systems Regulator, this is a matter for the PSR.
On 19 May, I updated Parliament that from the week commencing 25 May, NS&I would start to contact all affected estates, with holdings of £10 or more, to reunite them with the holdings owed to them. Remediation will be delivered in phases. NS&I has since issued letters to the first cohort of affected estates. NS&I aims to return holdings to affected estates as swiftly as possible and expects to complete its remediation programme in the first half of 2027.
NS&I has published a delivery plan that it will follow to ensure proactive, timely contact and will publish an update on progress against this plan on a quarterly basis.
The UK has a long history as a powerhouse of financial services innovation, which has made the UK one of the most attractive locations worldwide for Fintechs to start, scale, list, and stay. The Financial Services Growth and Competitiveness Strategy set out a comprehensive package of reforms to maintain the UK’s global leadership in Fintech.
The Government is committed to ensuring the UK is at the forefront of transformation, so that consumers and businesses benefit from faster, cheaper and more seamless financial technology. This includes in sectors such as payments, where the Government is implementing its National Payments Vision.
Hiring decisions in the Fintech sector are ultimately a matter for individual firms.
As required by the Sovereign Grant Act 2011, the next review of the Sovereign Grant is taking place this year. Further detail will be announced in due course.
The Government is committed to bringing forward legislation to reset the Grant to a lower level from 2027-28 once Buckingham Palace reservicing works are completed. The Government will bring forward the Sovereign Grant Bill when parliamentary time allows.
The High Value Council Tax Surcharge is a new charge on owners of residential property in England worth £2 million or more, ensuring those who own the most valuable properties pay their fair share.
Expenditure met from the Sovereign Grant and that met by the Foreign, Commonwealth and Development Office (FCDO) budgets serve distinct purposes.
The Sovereign Grant provides funding to support the official duties of working Members of the Royal Family, including staff, overseas travel to conduct and prepare for outward State Visits and the maintenance of the Occupied Royal Palaces. The FCDO and other departments meet separate costs associated with the UK’s diplomatic activity, both in the UK and overseas.
The FCDO funds in-country arrangements for outward State Visits, including accommodation and wider hosting arrangements. For inward State Visits, the FCDO funds the accommodation of the visiting delegation, as well as gifts and certain ceremonial activity, such as the State Banquet.
For activity undertaken in respect of His Majesty’s role as Head of the Commonwealth, the Sovereign Grant, FCDO and other departments fund respective activities that support the UK’s diplomatic objectives. Costs associated exclusively with The King’s role as Head of the Commonwealth may be met by the host country or participating Commonwealth member states. As with inward and outward visits, there remains a clear distinction between funding provided by the Sovereign Grant, and the funding provided by the FCDO and other departments for Commonwealth-related activity.
Opportunities for social landlords to participate in the contents insurance pilot will open later this year.
This is part of the Government’s Financial Inclusion Strategy which encompasses an ambitious package of measures to help people access the products they need and support household financial resilience. The Strategy recognises the important role that insurance products play in giving households the ability to weather financial shocks and identifies contents insurance as a product area with low take-up among those who may stand to benefit from it the most.
The Government’s key financial inclusion delivery partner, Fair4All Finance, is working with the insurance and social housing sectors to explore different methods of increasing contents insurance uptake for social renters. This will consider approaches to reduce friction in delivery methods, raise awareness, and increase uptake and choice.
Where a consumer has found it difficult to find cover, a broker can support them to identify and access a product which meets their needs.
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services.
The supply of energy for domestic use attracts the reduced rate of VAT (5 per cent). Whilst this relief was not designed or introduced for charging EVs at home, it applies for all uses of domestic energy, as it is not easy for energy companies to distinguish between electricity used to charge an EV and electricity used for general domestic purposes. Public EV charging, on the other hand, is subject to the standard rate of VAT (twenty per cent). This matches the VAT treatment of petrol and diesel, as well as all non-domestic electricity.
The Government will review the cost of public electric vehicle charging, looking at the impact of energy prices, wider cost contributors, and options for lowering these costs for consumers. Terms of Reference for the review will be set out in due course, and the review will report later in 2026.
Gift Aid is restricted to UK-registered charities so that UK taxpayer money only supports UK charities and Community Amateur Sports Clubs (CASCs), enabling strong oversight and fraud prevention.
UK charities are regulated by the Charity Commission, which can enforce standards, supporting HMRC to operate necessary compliance activity. These controls are far harder to apply to overseas organisations subject to different laws and regulators. Limiting eligibility to UK entities ensures Gift Aid benefits legitimate charities, and that any improper claims can be recovered.
Support for overseas causes, such as supporting Ukraine’s defence and reconstruction, can be carried out through UK-registered charities operating internationally.
For this reason, the Government has no plans at present to extend Gift Aid eligibility (or a bespoke and similar tax relief). The Government remains committed to supporting Ukraine through direct funding and other mechanisms.
Since the start of Russia’s full-scale invasion, the UK has committed £21.8 billion in support. This includes £13 billion in military support, up to £5.3 billion in non-military assistance, and a £3.5 billion export finance cover limit to support reconstruction and defence projects.
In 2026 alone support totals £5.2bn, this has included £1.5 billion in fiscal support, £700 million disbursed via the UK’s Extraordinary Revenue Acceleration loan, and £3 billion in standing military commitments.
At the Budget, the VO announced updated property values from the 2026 revaluation. This revaluation is the first since the pandemic, which has led to significant increases in rateable values for some properties.
In recognition of the impact of the revaluation on bills, the Government has introduced a support package worth £4.3 billion, to protect against ratepayers seeing large overnight increases in bills.
As a result, over half of ratepayers see no bill increases in 2026/27, including 23 per cent whose bills go down. This also means most properties seeing increases have them capped at 15 per cent or less in 2026/27, or £800 for the smallest.
Around a third of properties already pay no business rates as they receive 100 per cent Small Business Rate Relief (SBRR), with an additional 85,000 benefiting from reduced bills as this relief tapers.
The government offers a range of Business Rates reliefs. Guidance on these can be found here: https://www.gov.uk/business-rates-relief.
At the Budget, the VO announced updated property values from the 2026 revaluation. This revaluation is the first since the pandemic, which has led to significant increases in rateable values for some properties.
In recognition of the impact of the revaluation on bills, the Government has introduced a support package worth £4.3 billion, to protect against ratepayers seeing large overnight increases in bills.
As a result, over half of ratepayers see no bill increases in 2026/27, including 23 per cent whose bills go down. This also means most properties seeing increases have them capped at 15 per cent or less in 2026/27, or £800 for the smallest.
Around a third of properties already pay no business rates as they receive 100 per cent Small Business Rate Relief (SBRR), with an additional 85,000 benefiting from reduced bills as this relief tapers.
The government offers a range of Business Rates reliefs. Guidance on these can be found here: https://www.gov.uk/business-rates-relief.
Estimates of the Exchequer cost of the Replacement of Domestic Items Relief for landlords are not readily available.
Estimates of the cost of allowing incorporated landlords to deduct mortgage interest from rental properties are not readily available since landlords subject to Corporation tax are not required to report separately their residential finance costs.
The Import One Stop Shop is an EU VAT reporting and collection scheme for goods that are not subject to duty. It deals solely with the collection of VAT.
In line with the existing methodology, the Government announced on 19 May 2026 that the SCAPE discount rate is 2%+CPI.
HM Treasury is not the responsible authority for individual Public Service Pension Schemes. Regulation B7 of the Police Pension Scheme Regulations 1987 provides for commutation of pension to purchase lump sum and specifies that the rate is that set out by the Scheme Actuary. The factors were updated on 21 May 2026 to reflect the change to the SCAPE discount rate.
The Government remains committed to reviewing the SCAPE discount rate at every valuation cycle. The SCAPE discount rate was announced in Parliament on 19 May 2026. This is in line with established precedent for reviews of the SCAPE discount rate. Where the SCAPE discount rate changes, the factors used in the schemes (for example to calculate the commuted lump sum provided in exchange for a member giving up part of their pension) are reviewed in line with best practice and the law.
On 20 May, the Chancellor announced a package of infrastructure planning reforms to accelerate delivery of the most important clean energy projects, strengthen the UK’s energy security and support economic growth.
By reducing delays and making the judicial review process faster, more predictable and more focused on genuine legal concerns, these reforms are expected to give investors greater confidence and support continued investment in infrastructure projects.
More broadly, this Government believes that it matters where things are made and who makes them and is reforming public procurement so that more of what the public sector buys supports UK-based businesses, including in critical industries.
HM Treasury is working closely with relevant departments on the detailed policy and legislative framework for these infrastructure planning reforms. Further detail will be set out in due course.
On 20 May, the Chancellor announced a package of infrastructure planning reforms to accelerate delivery of the most important clean energy projects, strengthen the UK’s energy security and support economic growth.
These proposals include a new route for Parliament to approve projects designated as Critical National Importance, providing greater certainty where the national interest is clearest. The route would apply only to energy projects identified by the Energy Secretary as Critical National Importance, and any such designation would require explicit parliamentary approval.
HM Treasury is working closely with relevant departments on the detailed policy and legislative framework for these reforms. Further detail will be set out in due course.
On 20 May, the Chancellor announced a package of infrastructure planning reforms to accelerate delivery of the most important clean energy projects, strengthen the UK’s energy security and support economic growth.
Under these reforms, projects designated as being of Critical National Importance would still be required to proceed through the normal Development Consent Order process, and existing arrangements for considering impacts and hearing from affected communities would remain in place. This route would apply only to energy projects that the Energy Secretary designates as of Critical National Importance, and any such designation would also require explicit parliamentary approval
HM Treasury is working closely with relevant departments on the detailed policy and legislative framework for these reforms. Further detail will be set out in due course.
The UK announced that it is exploring setting up the Multilateral Defence Mechanism with Finland, the Netherlands and other partners by 2027. This will be designed to improve value for money and increase standardisation in the defence sector through joint procurement. It will enhance collaboration among allies and improve interoperability. It will aim to increase the availability of munitions and other critical capabilities when we need them most and aim to support a more resilient and efficient defence industrial sector, underpinned by more certainty of orders from aggregated demand through joint procurement from its members.
The Chancellor regularly discusses with NATO allies the need to meet the challenge jointly of increasing expenditure on our defence and resilience.
The UK announced that it is exploring setting up the Multilateral Defence Mechanism with Finland, the Netherlands and other partners by 2027. This will be designed to improve value for money and increase standardisation in the defence sector through joint procurement. It will enhance collaboration among allies and improve interoperability. It will aim to increase the availability of munitions and other critical capabilities when we need them most and aim to support a more resilient and efficient defence industrial sector, underpinned by more certainty of orders from aggregated demand through joint procurement from its members.
The Chancellor regularly discusses with NATO allies the need to meet the challenge jointly of increasing expenditure on our defence and resilience.
Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse an employee's expenses for business mileage in their private vehicle. The AMAP rate is advisory, so employers can choose to pay more or less than the advisory rate. Employees reimbursed less than the AMAP rate may be able to claim tax relief on the difference, depending on their circumstances. Amounts reimbursed over the AMAP rate are classed as earnings and subject to Income Tax.
In recognition of the pressures facing drivers, the Government announced in May the first uprating of these rates since 2011, backdated to April 2026. For 2026/27, mileage rates for cars and vans will increase from 45p to 55p per mile for the first 10,000 miles annually, followed by 25p per mile thereafter. These rates are UK-wide so apply to Northern Ireland.
The 25p per mile rate for mileage above 10,000 miles remains unchanged, reflecting that the average motorist drives fewer than 10,000 miles for work and the need to balance targeted support with overall fiscal responsibility. Employees can also claim an additional 5p per mile for each fellow employee transported. Mileage rates for other vehicles, including motorcycles, remain unchanged.
Looking ahead and beyond 2026/27, the Government has already committed to a review of these rates and will set this out at the Budget. More broadly, the Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy.
Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse an employee's expenses for business mileage in their private vehicle. The AMAP rate is advisory, so employers can choose to pay more or less than the advisory rate. Employees reimbursed less than the AMAP rate may be able to claim tax relief on the difference, depending on their circumstances. Amounts reimbursed over the AMAP rate are classed as earnings and subject to Income Tax.
In recognition of the pressures facing drivers, the Government announced in May the first uprating of these rates since 2011, backdated to April 2026. For 2026/27, mileage rates for cars and vans will increase from 45p to 55p per mile for the first 10,000 miles annually, followed by 25p per mile thereafter. These rates are UK-wide so apply to Northern Ireland.
The 25p per mile rate for mileage above 10,000 miles remains unchanged, reflecting that the average motorist drives fewer than 10,000 miles for work and the need to balance targeted support with overall fiscal responsibility. Employees can also claim an additional 5p per mile for each fellow employee transported. Mileage rates for other vehicles, including motorcycles, remain unchanged.
Looking ahead and beyond 2026/27, the Government has already committed to a review of these rates and will set this out at the Budget. More broadly, the Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy.
Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse an employee's expenses for business mileage in their private vehicle. The AMAP rate is advisory, so employers can choose to pay more or less than the advisory rate. Employees reimbursed less than the AMAP rate may be able to claim tax relief on the difference, depending on their circumstances. Amounts reimbursed over the AMAP rate are classed as earnings and subject to Income Tax.
In recognition of the pressures facing drivers, the Government announced in May the first uprating of these rates since 2011, backdated to April 2026. For 2026/27, mileage rates for cars and vans will increase from 45p to 55p per mile for the first 10,000 miles annually, followed by 25p per mile thereafter. These rates are UK-wide so apply to Northern Ireland.
The 25p per mile rate for mileage above 10,000 miles remains unchanged, reflecting that the average motorist drives fewer than 10,000 miles for work and the need to balance targeted support with overall fiscal responsibility. Employees can also claim an additional 5p per mile for each fellow employee transported. Mileage rates for other vehicles, including motorcycles, remain unchanged.
Looking ahead and beyond 2026/27, the Government has already committed to a review of these rates and will set this out at the Budget. More broadly, the Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy.
Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse an employee's expenses for business mileage in their private vehicle. The AMAP rate is advisory, so employers can choose to pay more or less than the advisory rate. Employees reimbursed less than the AMAP rate may be able to claim tax relief on the difference, depending on their circumstances. Amounts reimbursed over the AMAP rate are classed as earnings and subject to Income Tax.
In recognition of the pressures facing drivers, the Government announced in May the first uprating of these rates since 2011, backdated to April 2026. For 2026/27, mileage rates for cars and vans will increase from 45p to 55p per mile for the first 10,000 miles annually, followed by 25p per mile thereafter. These rates are UK-wide so apply to Northern Ireland.
The 25p per mile rate for mileage above 10,000 miles remains unchanged, reflecting that the average motorist drives fewer than 10,000 miles for work and the need to balance targeted support with overall fiscal responsibility. Employees can also claim an additional 5p per mile for each fellow employee transported. Mileage rates for other vehicles, including motorcycles, remain unchanged.
Looking ahead and beyond 2026/27, the Government has already committed to a review of these rates and will set this out at the Budget. More broadly, the Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy.
The government will introduce a 12-month holiday from Vehicle Excise Duty (VED, also known as road tax). This will apply to the majority of HGVs renewing their VED between 1 July 2026 and 30 June 2027. Eligible vehicles will pay just £1 for their annual VED, saving £600 for a typical heavy lorry. Tax classes eligible include: standard HGV (tax class 1); trailer HGV (tax class 2); special types (tax class 57); combined transport (tax class 23); and island goods vehicles (tax class 16). If a vehicle is liable for the HGV levy, it will continue to be charged at the existing rate.
This temporary reduction in VED is in recognition of the key role the road haulage sector plays in transporting goods, including food, across the UK and its disproportionate exposure to fuel costs. Fuel costs make up a substantial proportion of HGV operating costs, and this action will help prevent cost pressures from the Iran conflict spreading across the economy.
At £90,000, the UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD. This means the majority of UK businesses are not in the VAT system at all.
Any consideration of changes to the threshold would have to carefully balance potential impacts on small businesses, 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.
From 25 June to 1 September the Government is introducing a temporary reduced rate of VAT on children's menu meals and eligible family attractions.
This is a targeted and temporary scheme to reduce the costs of children’s meals in restaurants, children’s tickets for theatres and cinemas and tickets for everyone for attractions like soft play, adventure centres, and theme parks, helping families enjoy a day out for less. Individual businesses should consult HMRC’s guidance to determine how the rules apply in their circumstances.
The temporary reduced rate is estimated to cost about £300m. All costings will be subject to certification in the next OBR forecast in the usual way.
The Government expects participating businesses to pass savings on to families by lowering the prices people pay on eligible children's meals and tickets, so the VAT cut is reflected directly at the till.
The impact of the measure will be kept under review through communication with affected taxpayer groups.
The Government keeps all taxes under review and will continue to monitor the situation and make the necessary decisions to help protect households and businesses from price increases from the conflict in the Middle East. The Government’s priorities will continue to be helping families with the cost of living, including through protecting the public finances to support the Bank of England with its role in keeping inflation as low as possible
In addition to the recent extension of the fuel duty freeze and the 12-month Vehicle Excise Duty holiday for HGV's, the Government also announced the first uprating of mileage rates for employees using their own vehicle for work and the self-employed who use the simplified expenses rates, back-dated to April, recognising pressures facing these drivers. Mileage rates for cars and vans will increase for2026/27 from 45p to 55p for the first 10,000 miles, and 25p thereafter, with effect from 6 April 2026. Looking ahead and beyond 2026/27, the Government has already committed to a review of these rates and will set this out at the Budget.
HMRC estimates that the cost of changing the 20 per cent Standard Rate of VAT on all accommodation and food and beverage services to the Reduced Rate of 5 per cent would be around £17 billion in 2027-28
The Government recognises the significant contribution made by hospitality businesses to economic growth and social life in the UK.
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. A reduction on the scale outlined above would have significant implications for the funding of public services.
From 25 June to 1 September the Government is introducing a temporary reduced rate of VAT on children's menu meals and eligible family attractions.
This is a targeted and temporary scheme to reduce the costs of children’s meals in restaurants, children’s tickets for theatres and cinemas and tickets for everyone for attractions like soft play, adventure centres, and theme parks, helping families enjoy a day out for less. Individual businesses should consult HMRC’s guidance to determine how the rules apply in their circumstances.
Sport, including swimming pools, is not in scope of the relief. This is in line with the decision to focus on a narrower set of eligible activities to ensure the scheme is targeted and financially sustainable.
Many sports facilities which families use already enjoy some form of VAT relief, including many leisure centres and local swimming pools that are operated by local authorities and are out of scope of VAT already. Local authorities are able to reclaim their input VAT when providing sports facilities in leisure centres.
The VCS Grant Funding programme complements the Extra Support services HMRC provides and extends the Department’s reach. Grant Funding enables organisations to deliver trusted support to vulnerable and extra support customers with complex or unresolved tax issues. This helps those customers engage with HMRC and understand their obligations. The VCS support contributes to positive outcomes, building confidence, helping resolution and bringing tax affairs up to date. In 2025/26 the Scheme supported 43,000 individual customers.
HMRC has been accepting applications for exemption from Making Tax Digital (MTD) for Income Tax since September 2025.
Around 6,500 applications for exemption have been received to date. Decisions have been reached on around 60% of these cases, with approximately 75% of the determined applications granted exemptions based on the specific circumstances of each taxpayer.
Taxpayers may request a review or appeal decisions using established processes, with a very small number proceeding to appeal.
Eligibility is assessed on a case-by-case basis, including factors such as age, disability, health conditions, religious beliefs or lack of internet access; HMRC does not produce a single estimate of the number of those who may qualify.
In January 2026 HMRC had 15 FTE focused on exemptions. This increased to 42 in June 2026.
HMRC provides guidance and communications directly to taxpayers and works with agents, charities and representative bodies to help raise awareness of exemptions. Taxpayers who cannot use digital services can meet their obligations through alternative channels, mitigating the risk of inappropriate penalties.
The Government keeps the operation of MTD under review, including exemptions. Decisions on publishing further statistics in relation to MTD will be considered alongside wider transparency arrangements.
HMRC has been accepting applications for exemption from Making Tax Digital (MTD) for Income Tax since September 2025.
Around 6,500 applications for exemption have been received to date. Decisions have been reached on around 60% of these cases, with approximately 75% of the determined applications granted exemptions based on the specific circumstances of each taxpayer.
Taxpayers may request a review or appeal decisions using established processes, with a very small number proceeding to appeal.
Eligibility is assessed on a case-by-case basis, including factors such as age, disability, health conditions, religious beliefs or lack of internet access; HMRC does not produce a single estimate of the number of those who may qualify.
In January 2026 HMRC had 15 FTE focused on exemptions. This increased to 42 in June 2026.
HMRC provides guidance and communications directly to taxpayers and works with agents, charities and representative bodies to help raise awareness of exemptions. Taxpayers who cannot use digital services can meet their obligations through alternative channels, mitigating the risk of inappropriate penalties.
The Government keeps the operation of MTD under review, including exemptions. Decisions on publishing further statistics in relation to MTD will be considered alongside wider transparency arrangements.
HMRC has been accepting applications for exemption from Making Tax Digital (MTD) for Income Tax since September 2025.
Around 6,500 applications for exemption have been received to date. Decisions have been reached on around 60% of these cases, with approximately 75% of the determined applications granted exemptions based on the specific circumstances of each taxpayer.
Taxpayers may request a review or appeal decisions using established processes, with a very small number proceeding to appeal.
Eligibility is assessed on a case-by-case basis, including factors such as age, disability, health conditions, religious beliefs or lack of internet access; HMRC does not produce a single estimate of the number of those who may qualify.
In January 2026 HMRC had 15 FTE focused on exemptions. This increased to 42 in June 2026.
HMRC provides guidance and communications directly to taxpayers and works with agents, charities and representative bodies to help raise awareness of exemptions. Taxpayers who cannot use digital services can meet their obligations through alternative channels, mitigating the risk of inappropriate penalties.
The Government keeps the operation of MTD under review, including exemptions. Decisions on publishing further statistics in relation to MTD will be considered alongside wider transparency arrangements.
HMRC has been accepting applications for exemption from Making Tax Digital (MTD) for Income Tax since September 2025.
Around 6,500 applications for exemption have been received to date. Decisions have been reached on around 60% of these cases, with approximately 75% of the determined applications granted exemptions based on the specific circumstances of each taxpayer.
Taxpayers may request a review or appeal decisions using established processes, with a very small number proceeding to appeal.
Eligibility is assessed on a case-by-case basis, including factors such as age, disability, health conditions, religious beliefs or lack of internet access; HMRC does not produce a single estimate of the number of those who may qualify.
In January 2026 HMRC had 15 FTE focused on exemptions. This increased to 42 in June 2026.
HMRC provides guidance and communications directly to taxpayers and works with agents, charities and representative bodies to help raise awareness of exemptions. Taxpayers who cannot use digital services can meet their obligations through alternative channels, mitigating the risk of inappropriate penalties.
The Government keeps the operation of MTD under review, including exemptions. Decisions on publishing further statistics in relation to MTD will be considered alongside wider transparency arrangements.