Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South and Mid Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to to clause 32 in the Windsor Framework relating to VAT and excise, what assessment she has made of the potential merits of reducing the VAT rate in Northern Ireland.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies consistently across the UK to most goods and services. VAT is the UK’s second largest tax, forecast to raise £180 billion in 2025/26. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South and Mid Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will take steps to support (a) hospitality, (b) consumers, (c) pubs and (d) breweries by (i) reducing (A) VAT and (B) draught beer and cider duty and (ii) introducing targeted relief for (1) energy and (2) employment costs through the Autumn Budget 2025.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government recognises the significant contribution made by hospitality businesses, including pubs, to economic growth and social life in the UK.
The Government keeps all areas of the tax system under review. Any changes to the tax system are announced as part of the annual Budget process.
On VAT, 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. VAT reliefs reduce the revenue available to fund public services and must be good value for the taxpayer.
The current duty system supports breweries through Draught Relief, which ensures products served on draught pay less duty, and Small Producer Relief, which permits smaller producers to pay reduced duty rates.
In recognition of the economic and cultural importance of pubs, as well as the wider ‘on trade’, at Autumn Budget 2024 the Government cut alcohol duty on qualifying draught products by 1.7% in cash terms. This duty reduction, worth over £85m a year, covers approximately 60% of the alcoholic drinks sold in pubs and is equivalent to a 1p duty reduction on a typical pint.
As a Government we understand the importance to businesses of reducing their energy bills and reaching net zero and recognise the barriers businesses face trying to overcome these challenges. On energy costs, the Government has announced a new Zero Carbon Services Hospitality Trial, which aims to provide pubs, cafés, restaurants and hotels with free energy and carbon-cutting advice to slash their energy bills as part of the Government’s Plan for Change. This initiative is designed to help businesses reduce costs and support the transition to net zero.
Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South and Mid Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the effectiveness of the regulation of car insurance providers.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The government is determined that insurers should treat customers fairly and firms are required to do so under the Financial Conduct Authority’s (FCA) rules.
The FCA is an independent body responsible for regulating and supervising the financial services industry across the United Kingdom and has robust powers to act against firms that fail to comply with its rules.
The government plans to publish the final report of the cross-government Motor Insurance Taskforce in the autumn. The Taskforce has a strategic remit to set the direction for UK Government policy, identifying short- and long-term actions for departments that may contribute to stabilising or reducing premiums, while maintaining appropriate levels of cover.
Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South and Mid Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she had made of the potential impact of inheritance tax through secondary transfer charges on beneficiaries of estates relating to compensation from the infected blood scheme.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The suffering endured by all those impacted by infected blood is profound, and we remain committed to ensuring that justice is not only delivered but reflected in the way compensation is treated.
We recognise that this is a sensitive issue. We are considering whether further steps are needed in relation to IHT relief. However, it is important that we take the time to consider all aspects thoroughly to ensure any solution is both fair and effective.
Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South and Mid Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she plans to retain Digital Services Tax.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Digital Services Tax is an interim solution to widely held concerns with the international corporate tax framework, and the UK remains committed to remove it once a global solution on the reallocation of taxing rights is in place.
As the Chancellor has previously said, we will continue to make sure that businesses pay their fair share of tax, including businesses in the digital sector.
Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South and Mid Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has made a recent assessment of the potential merits of extending VAT energy-saving materials (ESM) relief to all domestic retrofit projects which include ESMs where other works are undertaken as part of the same project.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
This Government is committed to improving the quality and sustainability of our housing stock, through improvements such as low carbon heating, insulation, solar panels, and batteries. This will be vital to making the UK more energy resilient and meeting our 2050 Net Zero commitment.
Installations of qualifying energy-saving materials (ESMs) in residential accommodation and buildings used solely for a charitable purpose benefit from a temporary VAT zero rate until March 2027, after which they will revert to the reduced rate of VAT at five per cent.
VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. This includes most construction works. Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South and Mid Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the document entitled UK Infrastructure: A 10 Year Strategy, CP 1344, published on 19 June 2025, if he will publish the Barnett consequential for Northern Ireland for each new item of funding announced in that strategy.
Answered by Darren Jones - Minister for Intergovernmental Relations
The Barnett formula is applied when departmental budgets change – not when departments announce how they are spending their budgets.
When changes to UK Government departments’ budgets were confirmed at Spending Review 2025 on 11 June, the Barnett formula was applied in the usual way, providing Barnett consequentials to the Northern Ireland Executive. The devolved governments are receiving the largest Spending Review settlements, in real terms, since devolution in 1998.
The published Block Grant Transparency document provides a detailed breakdown of how the block grants are calculated and the next version will be published in due course.
Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South and Mid Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what the total value is of contracts awarded to outside providers for the provision of the Making Tax Digital programme.
Answered by James Murray - Chief Secretary to the Treasury
The MTD Programme’s current external supplier expenditure to date totals approximately £0.4 billion. MTD for VAT is expected to bring in over £4 billion in tax revenue by reducing error in VAT returns, whilst MTD for Income Tax is expected to bring in an additional £1.95 billion additional tax revenue by 2029 to 2030.
Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South and Mid Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment HMRC has made of the potential impact of quarterly reporting on smaller businesses.
Answered by James Murray - Chief Secretary to the Treasury
Quarterly updates required under Making Tax Digital (MTD) for Income Tax are not the same as full tax returns. They are simple summaries of income and expenses. Software will automatically draw data from a taxpayer’s digital records so where these records are up to date, updates will be quick and easy to submit.
Quarterly updates help to reduce the risk of error by moving record-keeping closer to real time. With this data already captured in software, preparing the end-of-year return should also be easier, as the information needed is already available. Quarterly updates can also provide estimates of tax liability and nudging and prompts to support users to get their tax right.
HMRC has an established model for estimating the impacts that result from MTD. The latest published assessment is available at:
MTD for VAT is already helping businesses to increase their productivity, with most users surveyed reporting benefits including time savings and greater accuracy.
Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South and Mid Down)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will ensure funding is made available to support economically inactive beneficiaries in Northern Ireland into employment after the end of UK Shared Prosperity Fund.
Answered by Darren Jones - Minister for Intergovernmental Relations
The UK Shared Prosperity Fund was extended at Autumn Budget 2024 at a level of £902m, providing support for local areas, including economic inactivity support in Northern Ireland. In 2025 – 2026, Northern Ireland was allocated £45.48 million under the UKSPF, of which £25.8m is expected to be spent on economic inactivity support. Further decisions on local growth funding are a matter for the Spending Review.
Wider employment support is the responsibility of the Northern Ireland Executive.