Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has undertaken research on the potential impact of a 20p discount on business rates for hospitality businesses on the entire high street.
Answered by James Murray - Financial Secretary to the Treasury and Paymaster General
The Government has introduced permanently lower multipliers for eligible retail, hospitality and leisure (RHL) properties. These provide nearly £1 billion per year of support to the RHL sector and benefit over 750,000 properties. High street businesses also continue to benefit from the Government's £4.3 billion support package announced at Budget 2025 to protect ratepayers seeing large overnight increases in bills due to the 2026 revaluation.
The Government is continuing to review the wider business rates system to ensure it better supports high streets, local economies and small businesses, and further decisions on business rates reform will be set out in the normal way at the Budget.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what research his Department has commissioned on the impact a lower rate of VAT for hospitality would have on (a) visitor numbers, (b) visitor spend and (c) length of stay of visitors.
Answered by James Murray - Financial Secretary to the Treasury and Paymaster General
The Government recognises the significant contribution made by hospitality businesses to economic growth and social life in the UK. The potential impacts of changes on this sector are carefully considered as part of policy development.
Where changes are made, relevant impact notes and assessments are published at fiscal events and otherwise as necessary, in line with the Government’s usual practice. The Treasury also engages regularly with the hospitality sector to understand the challenges they face.
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s third largest tax, forecast to raise £180 billion in 2025/26. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
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 2026-27, rising to £19.5 billion in 2030-31.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate his Department has made of the cumulative tax burden on the hospitality sector, including VAT.
Answered by James Murray - Financial Secretary to the Treasury and Paymaster General
The Government recognises the significant contribution made by hospitality businesses to economic growth and social life in the UK. The potential impacts of changes on this sector are carefully considered as part of policy development.
Where changes are made, relevant impact notes and assessments are published at fiscal events and otherwise as necessary, in line with the Government’s usual practice. The Treasury also engages regularly with the hospitality sector to understand the challenges they face.
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s third largest tax, forecast to raise £180 billion in 2025/26. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
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 2026-27, rising to £19.5 billion in 2030-31.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the Government intends to issue guidance under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 requiring enhanced due diligence for Hong Kong-linked transactions.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
Under the Money Laundering Regulations (MLRs), regulated firms and businesses must establish policies, controls and procedures to mitigate the risks of money laundering and terrorist financing, considering relevant risk factors relating to customers, transactions and the countries and geographical areas in which they operate. Regulated firms and businesses take a risk-based approach to these obligations, and must apply enhanced due diligence (EDD) measures when a customer or transaction is identified as high risk.
The MLRs require EDD in certain high risk circumstances, including for business relationships or transactions with countries identified as high risk countries subject to a call to action by the Financial Action Task Force. Hong Kong is not currently on that list.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate her Department has made of the total monetary value of taxpayer-funded COVID-19 support payments, specifically the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme, that were deducted by insurance companies from business interruption insurance payouts.
Answered by Rachel Blake
The Government has not made an assessment of the total monetary value of insurance company deductions from business interruption insurance payouts.
The Supreme Court published its final judgment in the FCA’s Business Interruption Insurance test case in 2021. At the time of the judgment, the FCA set out its expectation that insurers should communicate to all impacted policyholders what the judgment meant for their claim and should move quickly to resolve claims as determined by the judgment.
The FCA court case did not cover all potential issues with business interruption policies. The FCA has been clear that, in the event of further court rulings, insurers will need to consider carefully how the rulings impact claims they have already decided.
The FCA is continuing to supervise firms to ensure they are meeting their expectations and has robust powers to take action where necessary.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions she has had with the Financial Conduct Authority on the regulatory consistency of allowing insurers to deduct Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme payments from business interruption claims, whilst prohibiting the deduction of Local Authority Grants.
Answered by Rachel Blake
The Government has not made an assessment of the total monetary value of insurance company deductions from business interruption insurance payouts.
The Supreme Court published its final judgment in the FCA’s Business Interruption Insurance test case in 2021. At the time of the judgment, the FCA set out its expectation that insurers should communicate to all impacted policyholders what the judgment meant for their claim and should move quickly to resolve claims as determined by the judgment.
The FCA court case did not cover all potential issues with business interruption policies. The FCA has been clear that, in the event of further court rulings, insurers will need to consider carefully how the rulings impact claims they have already decided.
The FCA is continuing to supervise firms to ensure they are meeting their expectations and has robust powers to take action where necessary.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether changes to alcohol duty have increased revenue.
Answered by Dan Tomlinson - Exchequer Secretary (Cabinet Office) (Jointly with HM Treasury)
At Budget 2025 the Chancellor announced that alcohol duty would be kept constant in real terms by uprating it in line with the Retail Price Index (RPI) on 1 February 2026. The government does not expect this to increase revenue in excess of the Office for Budget Responsibility's forecast, which assumes that alcohol duty will be uprated annually.
HMRC’s alcohol duty receipts bulletin can be found here:
Alcohol Bulletin commentary (February 2026 to April 2026) - GOV.UK
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department has considered reducing taxation such as business rates for small businesses liable for Extended Producer Responsibility.
Answered by Dan Tomlinson - Exchequer Secretary (Cabinet Office) (Jointly with HM Treasury)
The Government believes it is right that the costs of dealing with household packaging waste are moved away from taxpayers and onto the businesses that place packaging on the market. The Government has designed the Extended Producer Responsibility (EPR) scheme to be proportionate, with the smallest producers exempt and small producers subject only to light-touch requirements. The government engaged extensively with businesses over many years on the design of EPR and is continuing to do so through its implementation.
The Government has also extended Small Business Rates Relief (SBRR) to support small businesses to grow and expand, by giving them an additional two years of SBRR when they open a second premise. Around a third of properties already pay no business rates as they receive 100 per cent SBRR, with an additional 85,000 benefiting from reduced bills as this relief tapers. SMEs in rural areas may also be eligible for Rural Rates Relief if they meet certain conditions.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the administrative costs for outlets of running a VAT reduction for children’s food only; what comparative assessment she has made of this policy and reducing VAT on all food; and whether her Department has received representations from Hospitality UK on the proposal.
Answered by Dan Tomlinson - Exchequer Secretary (Cabinet Office) (Jointly with HM Treasury)
From 25 June to 1 September the Government is introducing a temporary reduced rate of VAT on children's menu meals and family leisure activities
The relief for children’s meal is temporary and targeted to balance the policy's intention of supporting families with the cost-of-living and maintaining the Chancellor's commitment to stable public finances.
HMRC has published guidance for businesses to operationalise the measures, and the Government carefully considered the relative administrative burden before the announcement
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. Hot takeaway food, and “eat-in” food, are subject to the standard 20 per cent rate of VAT. Most other food is zero rated, including most traditional bakery products, such as bread, biscuits and cakes. However, there are certain exceptions, including some confectionery items such as chocolate covered biscuits and flapjack bars, which are taxed at the standard rate
HM Treasury regularly engage with the hospitality industry and UK Hospitality, who have publicly welcomed the Chancellor’s announcement.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential impact of lowering VAT on restaurant customers.
Answered by Dan Tomlinson - Exchequer Secretary (Cabinet Office) (Jointly with HM Treasury)
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. VAT is the UK's second largest tax, forecast to raise £180 billion in 2025/26.
Where restaurants incur VAT in producing the food they sell, this can be claimed back in the normal way, provided that they are registered for VAT. Businesses with a turnover below the £90,000 per year threshold may choose not to register for VAT, in which case they do not charge VAT on their sales and cannot reclaim it on their input costs.
HMRC estimate that the cost of a 5 per cent reduced rate for accommodation, hospitality and tourist attractions would be around £13 billion this financial year. If the scope were also to include alcoholic beverages, the cost would be approximately £3 billion greater.
More broadly, as announced at Autumn Budget 2024, the Government will introduce permanently lower business rates multipliers for retail, hospitality, and leisure properties with rateable values below £500,000 from 2026/27. This permanent tax cut will ensure they benefit from much-needed certainty and support.