Asked by: Andrew Ranger (Labour - Wrexham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential merits of reducing the rate of VAT for the hospitality sector.
Answered by James Murray - Exchequer Secretary (HM Treasury)
VAT is the UK’s third largest tax. It is forecast to raise £180 billion in 2025/26, which funds public services. VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
HMRC estimates that the cost of a 12.5 per cent reduced rate for accommodation, hospitality and tourist attractions would be around £6.5 billion this financial year, or £8 billion if it were to include alcoholic beverages.
Asked by: Andrew Ranger (Labour - Wrexham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to (a) reduce income inequality and (b) improve social mobility for people from lower-income backgrounds.
Answered by James Murray - Exchequer Secretary (HM Treasury)
Distributional analysis shows that the expected impacts of government decisions from Autumn Budget 2024 onwards are progressive and benefit households in the lowest income deciles the most, on average, as a percentage of income in 2028-29.
The Government is committed to making sure the wealthiest in our society pay their fair share of tax. That is why the Chancellor announced a series of reforms at Autumn Budget 2024 to help fix the public finances in as fair a way as possible. The increases in tax are concentrated on the highest income households. Overall, on average, all but the richest 10% of households will benefit from policy decisions in 2028-29.