His Majesty's Inspectorate of Constabulary and Fire & Rescue Services Report

Dan Tomlinson Excerpts

Wednesday 15th July 2026 Written Statements

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

Today, His Majesty’s Inspectorate of Constabulary and Fire and Rescue Services has published its report on how effectively His Majesty’s Revenue and Customs prevents and investigates insider risk, following an inspection in January and February 2024. I take the findings of this report extremely seriously and have been clear to HMRC that the findings needed to be acted on.

This independent inspection was commissioned by HMRC in recognition of the importance of security and resilience. The Department has been clear that it has a zero-tolerance approach to insider threat and, where criminal wrongdoing is identified, it takes swift action including dismissal and will pursue criminal prosecutions.

It is important to set out the context for this report: the fieldwork took place in January and February 2024, and the findings reflect the position more than two and a half years ago. All of the case studies referenced by inspectors had already been identified and dealt with by HMRC’s internal investigations before being shared with HMICFRS.

Senior officials have assured me that the Department has taken appropriate and proportionate action in all case studies, based on its policies. All of these decisions were taken in 2023.

HMRC is effective at detecting and taking action against internal fraud. Since the period covered by the report, the Department has taken significant steps to strengthen its controls and capability. HMRC has substantially completed 20 of the 22 recommendations, with further work under way on the remaining two.

These improvements include expanding and strengthening its internal investigations function, including increasing staffing and enhancing its ability to identify and respond to risks. The Department has introduced new systems, including a dedicated case management and intelligence platform, to improve the speed and effectiveness of investigations.

HMRC has also implemented a broader programme of reform that goes beyond the report’s recommendations. This includes establishing a dedicated insider risk management service to co-ordinate activity across the Department, strengthening governance through senior-level oversight, and enhancing data sharing between security, HR and investigative functions.

In addition, HMRC has placed greater emphasis on prevention and organisational culture. It has introduced mandatory training on internal fraud, bribery and insider risk for all staff and requires managers to actively assess and manage risks within their teams.

The Government have committed significant further investment in the resilience and security of HMRC’s systems, including funding announced at the spending review to modernise IT and data infrastructure.

I am happy with HMRC’s progress against the report’s findings, but I was disappointed that three recommendations made by HMICFRS in 2012 were not acted on at the time. This included assigning a member of HMRC’s executive committee to lead this vital work, which has now happened.

While the report highlights areas where improvements were needed, it also demonstrates that HMRC is effective at identifying and addressing insider risk. The Department has already acted on the vast majority of recommendations and has gone further in strengthening its approach.

HMRC employs around 70,000 staff, the vast majority of whom act with integrity and professionalism. The public can be confident that HMRC will continue to take robust action to protect taxpayers’ data and ensure that those who abuse their position are held to account.

[HCWS265]

Northern Ireland Hospitality Sector

Dan Tomlinson Excerpts

Wednesday 15th July 2026 Westminster Hall

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

It is a pleasure to speak under your chairmanship, Dr Murrison. I thank the hon. Member for South Antrim (Robin Swann) for securing this debate on an important issue facing hospitality businesses in Northern Ireland and for his recent question to me in Treasury orals on the same topic. I look forward to meeting him to discuss it further, as I committed to on the Floor of the House.

I thank hon. Members for their interventions, too. I congratulate my hon. Friend the Member for Newcastle-under-Lyme (Adam Jogee) on his festivities over in Northern Ireland.

[Adam Jogee]

I am grateful for the Minister’s belated congratulations. My wife probably feels like she has been married to me for a lifetime, although it has been three and something years.

[Dan Tomlinson]

rose—

[Jim Shannon]

Will the Minister give way on that point?

[Dan Tomlinson]

I will.

[Jim Shannon]

It is no wonder that the hon. Member for Newcastle-under-Lyme (Adam Jogee) had to go all the way to Northern Ireland to get an Ulster girl to marry. That tells you what Ulster women are like. They are the best.

[Dan Tomlinson]

rose—

[Adam Jogee]

Will the Minister give way? This is important.

[Dan Tomlinson]

I will.

[Adam Jogee]

I just want to put on record that I did not go to get anyone; she found me.

--- Later in debate ---

[Dan Tomlinson]

It is important that we return to the topic at hand, but I am very glad that my hon. Friend is happily married to, I am sure, a fantastic partner.

The Government recognise the important contribution that hospitality businesses make to jobs, growth and local communities across Northern Ireland and the United Kingdom as a whole. Cafés, pubs, restaurants and hotels support local economies and, as the hon. Member for South Antrim set out, are important for employment, particularly of young people who are trying to find their way in the jobs market, get experience, get a foot in the door and ready themselves for a career of productive work. They also play a vital role in our high streets and town centres.

I hear the concerns that have been raised about pressures facing the sector in Northern Ireland and across the wider country in terms of operating costs. I also understand the particular challenge in Northern Ireland from the comparisons with the hospitality VAT rate in the Republic of Ireland and cross-border competition. I recognise that the fact that consumers have that much more readily available choice is, as the hon. Gentleman said, a unique challenge facing businesses in Northern Ireland. I fully understand why he is raising the issue and campaigning on it on behalf of his constituents, and I commend him for his sterling work as a constituency MP.

[Alex Easton]

Will the Minister also acknowledge and comment on the added pressures of the Northern Ireland protocol and the Windsor framework, which add extra burdens to businesses in Northern Ireland?

[Dan Tomlinson]

There are a whole range of challenges and also benefits from the protocol and the Windsor framework. I agree with the hon. Member that they do not provide constraints on the policy choice on VAT. I always find it frustrating when Ministers hide behind legal constraints that perhaps are not always there, and I want to be up front with him: if a Government chose to do this, the protocol would not be a barrier.

Members have focused on the potential merits of a Northern Ireland VAT reduction pilot for hospitality, but VAT is a broad-based tax on consumption that applies to a range of sectors, and it also applies on a UK-wide basis. The Government’s view is that different VAT rates would create divergence between Great Britain and Northern Ireland, and impact the competitiveness of businesses between the two regions. I understand that Members are specifically talking about Northern Ireland, but across the country as a whole—some hon. Members did mention the broader campaign around reductions in VAT across the UK—a reduction to 10% in VAT for hospitality would cost around £11 billion a year, which is equivalent to the total expenditure on the Royal Navy or the annual child benefit bill.

There would be significant practical challenges associated with introducing a pilot for a different VAT treatment for hospitality in Northern Ireland only. Businesses, His Majesty’s Revenue and Customs, and consumers would then need to operate in a system that created different treatments for otherwise similar transactions. There would be boundary issues and administrative complexity to work through.

The fact that I am not announcing this change today does not mean that the Government do not take this issue seriously and understand the representations being made. We are also not standing aside. The Chancellor has introduced the Great British summer savings scheme, which is a temporary reduction in VAT on eligible family attractions and children’s meals over this summer, helping families with costs and encouraging footfall during the summer holidays. In England, the Government have also introduced new business rates multipliers for eligible retail, hospitality and leisure properties, a package of transitional reliefs, and the supporting small business scheme, which together amount to £4.3 billion of additional spending. The Barnett formula is applied in the normal way to those changes, so the Northern Ireland Executive received £185 million in consequentials as a result of those decisions.

The Government—and I personally, if I have the honour of staying in this role—will continue to listen carefully to representations from the hospitality sector, from the Northern Ireland Executive and, of course, from hon. Members. We will meet after the summer recess; I am as good as my word. However, we do not believe that a Northern Ireland-specific hospitality pilot is the right approach. As tempting as it is to burnish my devolution credentials ahead of an impending reshuffle, I will not make that commitment today.

I thank the hon. Member for South Antrim for securing this debate and for strongly representing his community. This is an important issue, and I am happy to continue discussing it.

[Jim Shannon]

The Minister is making a very good and clear speech. He referred to parts of Europe whose Governments are considering a VAT reduction because they recognise the importance of the hospitality sector. Are the Government considering that? If there is an evidential base for it, perhaps they and the Minister will at least consider it at some stage to see what can be used to our advantage.

[Dan Tomlinson]

Right now, we are engaging in what could be seen as a similar proposal to the one put forward today. We are doing a time-limited reduction in VAT, not for one sector and one part of the country, but for particular leisure and hospitality activities and consumption across the country as a whole. I am sure that His Majesty’s Revenue and Customs and others will conduct thorough evaluations of that, so that we can see the impact that it had.

We expect businesses to pass the reduction in VAT on to consumers. Some big organisations, such as Merlin Entertainments, have already done that by setting new ticketing prices for families this summer, and many small businesses have been changing the prices on their menus for children’s meals. I hope that once this Great British summer savings period ends on 1 September, we will review that and look at the impact.

Of course, the challenge with any VAT reduction is whether it will be passed on to consumers. To be clear, I do not begrudge businesses having more margin, but the objective of the hon. Member for South Antrim is to see prices fall. When VAT changes have been made in times gone by, the gains have not always flowed entirely to consumers. The Government have been working really hard to ensure that businesses pass on the reduction in the Great British summer savings scheme. As I say, we are really glad that many have done so. I look forward to continuing to discuss this important topic, and to seeing the impact of the temporary and targeted changes that we have made to VAT this summer.

Question put and agreed to.

Carbon Border Adjustment Mechanism: July 2026 Delivery Update

Dan Tomlinson Excerpts

Tuesday 14th July 2026 Written Statements

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

The Government are introducing a carbon border adjustment mechanism from 1 January 2027 which will ensure that highly traded, carbon-intensive goods which are imported into the UK face a comparable carbon price to what is paid by manufacturers producing the same goods in the UK.

Following Royal Assent of the Finance Act 2026, which provides the legislative framework for the UK CBAM, the Government consulted on CBAM secondary legislation in early 2026. After considering the responses to the consultation carefully, the first tranche of secondary legislation has been laid today, setting out the majority of the detailed design and administrative framework for CBAM.

Further secondary legislation, confirming details on how to monitor, report and verify emissions, will follow. Comprehensive guidance will also be published later in the year, which will further assist businesses in complying with CBAM.

The scope of CBAM remains unchanged, with the sectors included being iron and steel, aluminium, fertiliser, hydrogen and cement.

The Government recognise that stakeholders are keen to know more about the UK’s approach to setting default values. The Treasury is carefully considering the methodology for setting these values.

The Government will set out specific values in the autumn; ahead of that, I can reassure interested parties that in line with schedule 17 of Finance Act 2026, the Treasury’s guiding principle in setting default values will be to ensure liable persons do not gain an advantage from using default values over determining the actual embodied emissions of imported CBAM goods.

This means that default values will not be set as a simple global average, but will instead be based on a trade-weighted average. In order to best reflect the imports most likely to rely on default values rather than actual emissions, we will look to exclude data from jurisdictions with robust mandatory MRV systems such as the EU. Where appropriate, we will consider applying additional mark-ups to ensure the environmental integrity of CBAM.

The Government committed previously to consider the feasibility of moving to an alternative approach in future, and will set out more detail on future plans for default values in the autumn, alongside the full list of default values for 2027.

[HCWS245]

Employees Travelling Outside the UK: Expenses Rate

Dan Tomlinson Excerpts

Tuesday 14th July 2026 Westminster Hall

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

It is a pleasure to speak in this debate with you in the Chair, Sir Christopher. I thank my hon. Friend the Member for Crawley (Peter Lamb) for raising this important issue today and for the work that he and neighbouring MPs, on a cross-party basis, have been doing to highlight the concerns that their constituents have raised with them.

I can see that hundreds of people in the Crawley constituency have signed the petition. It is similar in Horsham and people near Heathrow and other major airports have signed it, too. The issue clearly affects many staff who work in the airline industry and, as my hon. Friend points out, particularly affects those who are on lower wages. Yes, they might enjoy and love the travel and going to visit so many different places as part of their work, as well as the benefits that come from a job working in the sky and working for airlines, but there are costs associated with being away from home. It was right to have the overseas scale rates system in place back in 2014, but it is not right at that the system has not been updated since then.

The OSRs play an important role in reducing administrative burdens when employees incur subsistence costs while travelling overseas, and the key thing is that they provide a practical alternative to reimbursing and evidencing every single expense. As a result, if they were abolished at any point in the future, that could place a significant burden on airlines, which is certainly something we want to avoid.

As my hon. Friend set out, the rates have remained more or less frozen since 2014. I was doing the maths earlier today in preparation for the debate, and I came up with a similar figure to him. If they had been uprated in line with inflation in the UK, they would have increased by 40% since 2014. Of course, inflation rates vary across the globe, but that gives us a sense of the size of the gap that has opened up over the last 12 years.

The Government have been listening to representations made by airlines, individuals and Members of Parliament, including my hon. Friend. As we announced just a few short weeks ago, we will review both the OSRs and the benchmark scale rates, which are the domestic equivalents that set out the scale rates for lunches and dinners that employees may have when they are in the UK on business.

We will also look not just at uprating the rates but at whether there is scope to simplify the OSRs. We want to engage in detail with businesses on such a proposal, and officials in HMRC have already begun that work. Rather than having hundreds of individual rates for individual countries that need to be updated in a painstaking and administratively costly way, and that are also difficult for businesses to administer, we may find that having buckets or bands works better for employers and employees. That is something we will want to look at as part of this review, so I would really welcome representations from my hon. Friend the Member for Crawley and the hon. Member for Horsham (John Milne) on what changes their constituents would like to see.

Let me be clear: we have not taken any decisions on where we would like to go, and our mind is not made up. We are convinced that we want to review the rates to make the system better, but we want to consider the issues carefully and gather evidence from those who are affected before a decision is made. Just last week, I met the CBI, which represents some of the large airlines, and it welcomed the announcement of a review. I look forward to receiving further representations from the private sector.

As my hon. Friend pointed out, it is important for the Government to strike the right balance between supporting businesses and maintaining fairness in the tax system, while also protecting the Exchequer to ensure that, in the round, we raise the necessary revenue to fund and put right our public services after the last 14 years, when too many were cut back. We also need to ensure that any administrative arrangements such as these remain straightforward and proportionate.

Of course, there is political change in the air, but I hope that this review will conclude in time for the Budget. We do not want to be in a place where, in years to come, we are still waiting for these changes. I hope that we can make swift progress in the coming months, so that my hon. Friend’s constituents, as well as employees of airlines across the country, can see some improvement.

I am grateful to my hon. Friend for securing this debate, and I am grateful to the hon. Member for Horsham for his intervention. I will take the strength of feeling in their representations back to the Department, for as long as I will be there.

Question put and agreed to.

Finance Bill 2026-27: Draft Legislation and Tax Documents

Dan Tomlinson Excerpts

Monday 13th July 2026 Written Statements

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

The Government are today publishing draft legislation ahead of inclusion in the next Finance Bill. This allows for technical consultation on the application of tax policy in legislation. The Government are also publishing some new consultations and a number of responses to consultations on tax policy which have concluded.

The final contents of Finance Bill 2026-27 will be decided by the Chancellor at the next Budget.

Modernising the tax system

The Government are committed to modernising the tax system so that it is fit for our 21st-century economy and provides sustainable revenue to fund our public services into the future.

Electric vehicle excise duty: as announced at Budget 2025, the Government are publishing draft legislation to implement eVED, a new mileage charge for electric and plug-in hybrid cars, which will come into effect from April 2028. Drivers will pay for their mileage alongside their existing VED. The Government have also published a summary of responses to the eVED consultation which confirms the Government decision on aspects of the tax’s design and implementation.

Oil and gas revenue levy: as announced at Budget 2025, the Government are publishing draft legislation for the new permanent levy to tax exceptional oil and gas revenues in times of high prices. This had previously been referred to as the oil and gas price mechanism. Today, the Government confirm it will be legislated for as the oil and gas revenue levy. The OGRL will take effect when the energy profits levy ends at the end of March 2030, or earlier if the energy security investment mechanism is triggered. It will apply to upstream oil and gas companies operating in the UK or on the UK continental shelf, ensuring that companies continue to pay their fair share of tax in times of high prices. The OGRL will apply at a rate of 35% to revenues from oil and gas sales above specified thresholds. For 2026-27, these thresholds will be set at $90 per barrel for oil and 90 pence per therm for gas and will be adjusted annually in line with the preceding December’s consumer prices index. The measure aims to provide a stable and predictable fiscal environment, supporting investment and jobs while capturing windfall revenues of energy companies.

Reform of the foreign permanent establishment exemption: as announced on 21 May 2026, the Government are publishing draft legislation to exempt profits and losses attributable to foreign PEs from UK tax. This measure protects the UK’s corporation tax base by preventing losses from foreign activities being used to reduce UK tax liabilities. The draft legislation builds on an existing elective regime to mandate that amounts of profit and loss allocable to foreign PEs are excluded from the CT computation. The provisions will have effect for accounting periods beginning on or after 1 January 2027. The legislation prevents changes to the length of accounting periods delaying the operation of the provision. The draft legislation includes a provision to counteract avoidance arrangements by making adjustments to assessments, this will apply to businesses with foreign PEs who enter into arrangements on or after 13 July with a main purpose of obtaining a tax advantage and where the arrangements circumvent the operation of the principal measure.

Stamp taxes on shares modernisation: as previously announced, stamp duty and stamp duty reserve tax are due to be replaced with a single tax on transfers of securities. The securities transfer tax, which will be a modern, digital, self-assessed tax, will be introduced in 2027, with an update on the commencement date to be provided this Autumn. The Government are today publishing draft legislation and a summary of responses to the consultation on the 1.5% charge on certain overseas transfers of UK securities.

Removal of the landfill tax exemption for stabilisers added to dredgings: as announced at Budget 2025, the Government are publishing draft legislation to remove the landfill tax exemption for stabilisers added to dredged material before disposal at a landfill site from April 2027. As a result of this change, only the dredged material itself will remain exempt. Any additional material used to stabilise dredgings, such as air pollution control residues, will be subject to landfill tax at the relevant rate. The change is intended to limit the amount of hazardous stabiliser used and to encourage the recycling of materials such as APCr. The Government are confident that there are alternative practical and cost-effective methods of stabilising dredged material.

Mandatory reporting of benefits in kind from April 2027: as announced in June 2026, the Government are publishing draft primary legislation to introduce mandatory payrolling of benefits in kind from 6 April 2027, as part of wider reforms to modernise the tax system and improve the accuracy and timeliness of reporting of BIKs. The draft legislation sets out the framework for the mandatory reporting through real-time information, alongside provisions to ensure a proportionate approach to penalties during the initial years of implementation. It provides powers to ensure that certain benefits will remain outside mandatory payrolling where real-time reporting is not yet practical. The Government will continue to engage with stakeholders, including employers, payroll professionals and software providers, to support design and implementation.

Reforms to civil tax information and inspection powers and to modernise the definitions about computer records: as indicated at the 2026 tax update, the Government are publishing draft legislation on a number of reforms which will improve HMRC’s ability to carry out compliance checks by meeting OECD global forum standards on information exchange related to deceased taxpayers and cryptoasset-related businesses. This will be achieved by improving the administration and record-matching of an information notice that requires the identification of a taxpayer, by allowing flexibility in publishing reporting data, and by modernising definitions about computer records to ensure that HMRC can effectively access and process information in a modern, digital economy.

Pillar 2 side-by-side package and further amendments: as announced on 7 January 2026, the Government are implementing the pillar 2 side-by-side package into UK legislation in line with administrative guidance published by the OECD-G20 inclusive framework on base erosion and profit shifting in January 2026. The Government are now publishing draft legislation for both the side-by-side package and technical updates to the UK’s pillar 2 rules. These updates are being made in response to stakeholder feedback and to maintain consistency with the commentary and administrative guidance to the pillar 2 rules developed by the UK and other members of the inclusive framework.

The taxation of stablecoins: the Government are publishing draft legislation in relation to the tax treatment of eligible stablecoins. For individuals and trustees, disposals of eligible stablecoins will be exempt from capital gains tax and certain interest-like returns in respect of eligible stablecoins will be treated as savings income. For companies, the tax treatment of particular transactions involving eligible stablecoins will be based on amounts recognised in their accounts. The Government are publishing a summary of responses to the call for evidence, which ran between 26 March and 7 May 2026.

Cryptoasset loans and liquidity pools: the Government are publishing draft legislation for individuals and trustees in relation to cryptoasset loans and liquidity pools. This will treat certain disposals as being “no gain, no loss”, which defers capital gains tax until an economic disposal of the cryptoasset and better aligns the tax outcome with the economic substance of these arrangements.

Closing the tax gap

The Government are determined to close the tax gap and make sure that everyone pays the tax that they owe.

Publishing details of deliberate defaulters: following announcement at Budget 2025, the Government are publishing draft legislation that aims to strengthen the PDDD policy. The new legislation will allow HMRC to publish more information about the deliberate non-compliance that led to the defaulter’s details being published. In addition, the threshold for publication is being increased to £50,000 potential lost revenue. The reforms aim to increase transparency of HMRC’s compliance work and strengthen PDDD’s effect as a deterrent to deliberate non-compliance.

Modernising the correction of errors: as announced at Budget 2025, the Government are publishing draft legislation to modernise the correction of inaccuracies in returns or documents provided to HMRC. It introduces an explicit obligation on taxpayers to take reasonable action to correct errors once they are identified. It also gives HMRC a new power to issue a customer correction notice, which requires the taxpayer to check their position, and either correct the inaccuracy or explain why no correction is needed. This will help resolve simple, common issues more quickly and proportionately and improve consistency and fairness by setting a clear expectation that customers self-correct errors.

Alcohol duty penalty reform: the Government are publishing draft legislation to align alcohol duty penalties with wider penalty reform. This change affects producers of alcoholic products who submit monthly alcohol duty returns and payments. A new points-based system replaces the old penalties for alcohol producers who have missed the monthly deadlines. This new system is simpler and fairer, helping producers meet their monthly requirements. With the points system, not every mistake will lead to a financial penalty. Producers will only receive a penalty once a points threshold is reached after repeated late submissions.

Individual savings accounts, and introduction of a new compliance framework for ISA managers: as announced in June 2026, the Government are publishing draft primary legislation to enable the introduction of a new ISA manager compliance framework. It will provide clarity to ISA managers on their obligations, including meeting deadlines and reporting information accurately. It will strengthen protections for investors, while also supporting the move to digital ISA reporting.

Withholding of tax for rewards received under the strengthened reward scheme: the Government are publishing draft legislation on the tax treatment of rewards received by informants under the strengthened reward scheme, which launched at Budget 2025. This scheme increases the rewards paid to informants who provide HMRC with high-value information. For cases where tax over £1.5 million is recovered, HMRC will pay rewards up to 30% of the additional tax collected that would otherwise have gone unpaid. This legislation simplifies the tax payment process for recipients of the reward as income tax due is deducted at the source. This change will take effect from Royal Assent of the Finance Bill 2026-27.

Simplifying the tax system

The Government are simplifying the tax system to ensure that the system works effectively for all taxpayers and to make it easier to get tax right first time.

VAT provisions for drink deposit return schemes: as announced at Budget 2025, the Government are publishing draft legislation to introduce new VAT accounting rules for supplies made under a deposit return scheme. The new rules are designed to simplify VAT accounting. Under current VAT legislation concerning a DRS, the producer or importer who first supplies the drink in the UK is required to account for VAT on deposits relating to containers that are not returned. Under this measure, instead of VAT being accounted for by producers and importers, the deposit management organisation—the body with statutory responsibility for operating the DRS —will be required to account for VAT on deposits that are not refunded because containers are not returned. As a result, no business in the supply chain will need to account for VAT on the deposit element of the price at each stage. Instead, the VAT liability on unreturned deposits will rest centrally with the DMO.

Enterprise management incentives, and removal of the grant of options notification: as announced at Budget 2025, the Government are publishing draft legislation to remove the requirement for a company to submit a separate notification of a grant of EMI options. Instead, a company will be required to report details of the grant of options through the existing EMI end-of-year return. The change supports companies by simplifying the process to grant EMI options and reducing administrative burdens. These changes will apply to options granted on or after 6 April 2027.

Defined benefit pensions, and surplus extraction tax regime: as announced at Budget 2025, the Government are publishing draft legislation to introduce a new authorised payment from defined benefit pension schemes, allowing surplus funds to be paid directly to members. Under current rules, surplus payments to members are treated as unauthorised and subject to a tax charge. This measure will create a new category of authorised member payment, enabling schemes to distribute surplus to members as pension income, taxed at the individual’s marginal rate. This reform forms part of wider changes to modernise the defined benefit pension system and support the effective use of surplus assets, while maintaining appropriate safeguards and trustee responsibilities. Decisions to distribute surplus will remain at the discretion of scheme trustees and subject to scheme-specific circumstances. The legislation will take effect for payments made on or after 6 April 2027.

Corporation and income tax, and profits from exploration and exploitation rights: the Government are publishing draft legislation to ensure that profits from exploration and exploitation rights relating to oil and gas activities are defined in a clear, consistent and internationally aligned way when the UK’s domestic rules interact with the UK’s double taxation agreements. The update has effect in relation to accounting periods beginning on or after 1 April 2027 for corporation tax purposes and will have effect from 6 April 2027 for income tax purposes. The measure is expected to have a negligible impact on compliant businesses and is not expected to impose any significant additional administrative burdens.

Stamp duty land tax, and local government pensions scheme reform relief: as announced at Budget 2025, the Government are publishing draft legislation which provides a time-limited relief from stamp duty land tax for certain property acquisitions made by local government pension scheme pooled investment vehicles from LGPS administering authorities. This will apply from Budget day 2026, ceasing on 31 March 2032. It will enable the LGPS to reduce operating costs, become more competitive and attract investment by helping drive consolidation and strengthening the management of LGPS investments. This supports the Government aims to promote growth and increase investment in the UK.

Cultural gifts scheme: as announced at tax update 2025, the Government are publishing draft legislation to reform the cultural gifts scheme by removing the restriction on jointly owned objects and allowing tax credits to be used more flexibly. This will simplify the scheme by making it more accessible and improve take-up. The changes will come into effect from April 2027.

Making the tax system fairer

The Government are committed to ensuring that the tax system is fair and sustainable.

Reforming the customs treatment of low-value imports into the United Kingdom: as announced at Budget 2025, the Government are publishing draft legislation to reform the customs treatment of low-value imports, delivering on its commitment to modernise the handling of high-volume, low-value goods entering the UK. This measure will remove the £135 LVI relief, making LVIs subject to customs duty, and introduce a new set of customs arrangements designed to support fair competition and improve compliance. The Government are also publishing a consultation response document for LVIs. The document provides an overview of stakeholder views and detail on how the LVI reform will operate, including: standard import customs arrangements, new LVI customs arrangements and tariff treatment, alongside indicative detail on applying an additional fee on LVIs and aligning the VAT treatment with the new customs arrangements.

Soft drinks industry levy: the Government are publishing draft legislation to give effect to the changes to the soft drink industry levy announced at Budget 2025. From 1 January 2028 the Government will reduce the threshold at which the SDIL applies from 5 grams to 4.5 grams of sugar per 100 ml and remove the exemptions for milk-based and milk substitute drinks with added sugar. This technical consultation is to confirm that the legislation works to deliver the policy as set out in the Government consultation response.

Air passenger duty, and extension of the higher rate: as announced at Budget 2025, the Government are publishing draft legislation to extend the scope of the higher rate to all aircraft of 5.7 tonnes or more used as a private jet, to ensure the tax is applied consistently and that those who can afford to fly privately make a fair contribution. The change will take effect from April 2027.

Vehicle excise duty exemption for search and rescue vehicles: as announced at Budget 2025, and following consultation with stakeholders, the Government are publishing draft legislation to support the vital work of search and rescue charities. From 1 April 2027, eligible search and rescue vehicles operated by these charities will be exempt from vehicle excise duty.

International student levy: as confirmed in September 2025, the Government are publishing draft legislation to introduce an annual levy on higher education providers for their registered international students. The revenue raised will be fully reinvested into the higher education and skills system, including funding the reintroduction of maintenance grants for disadvantaged students. The levy will be set at £925 per international student, commencing from 1 August 2028 for the 2028-29 academic year. The Government intend that the levy amount will increase each year in line with inflation, that payments will be made by the registered provider in arrears the following academic year, and that each registered provider will be given an annual allowance of 220 international students that are not subject to the levy. Alongside this draft legislation, the Government are also publishing a Government response to the technical consultation on the levy that ran from 26 November 2025 to 18 February 2026.

Other consultations

Removing national insurance contributions debt from the scope of the Limitation Act 1980 and aligning processes with other forms of taxation: as announced at the 2026 tax update, the Government are publishing a consultation on proposals to remove national insurance contributions debt from the scope of the Limitation Act 1980 and to align NICs recovery processes more closely with other forms of taxation. This was a recommendation from the Office of Tax Simplification in their report “The closer alignment of income tax and national insurance” published in 2016. The proposed changes aim to simplify the tax system by ensuring greater consistency in how debts are treated across taxes, reducing complexity and administrative costs associated with current recovery processes. The consultation seeks views on how best to modernise and streamline those arrangements while maintaining appropriate safeguards.

Simplification of withholding tax on interest: the Government are publishing a consultation on simplifying the administration of treaty relief on withholding tax on payments of interest. The consultation seeks genuine and meaningful simplification to make it easier for taxpayers to obtain relief to which they are already entitled, while maintaining robust safeguards against avoidance. The Government’s aim is to ensure that the relevant processes provide adequate protection without imposing excessive administrative burden on either taxpayers or HMRC.

Land remediation relief: the Government are publishing a consultation seeking views on potential reforms to make land remediation relief more accessible, better targeted, and more closely aligned with the practical realities of brownfield development. The consultation seeks views on changes to the timing of the relief, aligning eligible contamination expenses with planning processes, and how to define and provide relief for long-term derelict land. The Government will work with industry to test the viability of these reforms and will only implement them if it is certain they offer meaningful cost-effective support to the sector.

Tax treatment of predevelopment costs: the Government are publishing a consultation on the tax treatment of predevelopment costs, meeting the commitment set out in the corporate tax road map. The consultation seeks views and evidence from stakeholders on the types of costs incurred, their treatment under the current rules, and the impact on investment decisions.

[HCWS221]

Donated Medicines: VAT

Dan Tomlinson Excerpts

Thursday 2nd July 2026 Written Statements

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

In response to an oral question on Tuesday 23 June, I announced that the Government will take forward a new approach on VAT on free of charge donations of medicines, consisting of either changes to the VAT rules or a reimbursement scheme. I can now give the House further details on this announcement.

Under UK VAT law, some transactions where no money changes hands are treated for VAT purposes as if a supply has been made and so VAT is due—these are known as deemed supplies. These are long-standing VAT rules in place to keep the system fair if a business has reclaimed VAT on costs.

Pharmaceutical companies donate certain medicines to the NHS, such as through early access schemes. For many years, under these long-standing VAT rules, some pharmaceutical businesses have been paying VAT on donations of medicines. Other businesses have not, and in 2023 HMRC wrote to the sector to begin the process of making sure firms paid the correct tax.

The Government understand that any additional VAT burden on medicines provided free of charge has the potential to impact patient outcomes, and so the Government will bring forward a new approach as soon as possible.

Changes will be effective for donations made on or after 23 June 2026 and the Government will engage with stakeholders on these options.

[HCWS177]

HMRC Transformation Road Map

Dan Tomlinson Excerpts

Thursday 2nd July 2026 Written Statements

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

Today, the Government are providing an update on HMRC’s transformation road map, setting out the progress made in the first year of delivery and sharing HMRC’s transformation priorities for 2026-27.

Published in July 2025, HMRC’s transformation road map maps out a five-year programme to build a tax and customs system that works better for everyone, including over 100 commitments to enhance day-to-day performance, close the tax gap and reform and modernise tax and customs administration. Delivering this ambition requires sustained investment, bold reform and a willingness to do things differently.

Digital services are an essential part of how HMRC is improving the experience of its customers: 78% of customer interactions are now taking place digitally, with 2.8 million new HMRC app users in 2025-26—bringing the total number of unique users to over 7.6 million—and nearly 20 million people now using personal tax accounts. This is significant progress towards our ambition of at least 90% of customer interactions being digital by 2030.

The introduction of Making Tax Digital for Income Tax in April 2026 marked the biggest modernisation of the tax system for a generation, helping people to get their tax right first time and reducing error through digital record-keeping.

In laying the foundations for this digital transformation, HMRC has improved telephony performance with call waiting times almost halving over the past two years. As HMRC modernises its services, it is continuing to support customers who are in vulnerable circumstances, digitally excluded or have complex tax affairs, including through existing channels such as phonelines.

The Government have also acted to strengthen compliance, ensure fairness and tackle those who seek to break the rules. HMRC is making good progress in recruiting and training 5,500 new compliance officers and 2,400 debt management officers, alongside increasing HMRC’s use of artificial intelligence tools, strengthening the reward scheme for informants and using new powers to tackle dishonest tax advisers.

This year has also seen an important step in reform and modernisation, through the integration of the Valuation Office into HMRC. This brings together two organisations with a shared ambition to deliver a modern, digital-first service which protects the funding that underpins public services and frees businesses to focus on growth. As part of this update, the Valuation Office has set out how it will improve valuation services, speed up decisions, increase trust and transparency, and modernise the administration of property tax.



This first year of delivery represents an important step towards the Government’s long-term ambition for a tax and customs system that is simpler, more efficient, and better supports taxpayers and businesses, while ensuring that everyone pays the tax that is due.

HMRC will continue to build on this progress over the coming years, informed by engagement with stakeholders and customers and guided by our HMRC charter commitments. Further updates will be provided as delivery continues, including reporting progress against the commitments set out in the road map.



The HMRC transformation road map update can be found at:

https://www.gov.uk/government/publications/hmrc-transformation-roadmap-progress-update-2026

[HCWS181]

Taxation (Energy and Vehicles) Bill

Dan Tomlinson Excerpts

Wednesday 1st July 2026 Commons Chamber

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

I will open this debate in Committee of the whole House by reminding the House—though I am sure Members know what is in this Bill—of the purpose of the Bill, which is to respond to increases in costs for families and businesses in the UK because of the conflict in the middle east. Even though we have just completed Second Reading, as we are now in Committee, I will address the clauses of the Bill in turn—Members will be relieved to know that there are only four clauses, so it should not take too long. I will address the amendments that have been tabled in my closing speech, which, with the leave of the House, I intend to make.

Clause 1 makes changes to ensure that the electricity generator levy rate will rise from 45% to 55% from today, 1 July. As my hon. Friend the Economic Secretary to the Treasury set out, in the UK the majority of our electricity is generated from renewables. Despite that, when the crisis in the middle east pushed up international gas prices, the cost of electricity, and so the cost of living, rose too, because electricity prices are still largely set by the price of gas. The changes made by this clause will ensure that a greater proportion of any exceptional revenue that many non-gas generators may receive because of the conflict in the middle east is available to Government to support businesses and households where appropriate.

As we have discussed, the Government also announced back in April that we are acting to de-link electricity prices from gas prices through new voluntary long-term fixed contracts being offered to existing low-carbon generators. As we have discussed, these are known as wholesale contracts for difference, and the changes made by clause 1, increasing the rate from 45% to 55%, will encourage participation at a competitive price in these WCfDs.

Clause 2 makes changes to increase the generosity of mileage rates for 2026-27 for employees and self-employed individuals who use their car or van for work from 45p to 55p for the first 10,000 miles and 25p thereafter, with effect from 6 April 2026. I forgot to respond to the shadow Exchequer Secretary asking me earlier why we have not increased the rates above 10,000 miles. I did respond to that point in the Ways and Means debate last week and think the Government have got the balance right here. We are supporting all drivers, noting that of course for a driver who drives 10,001 miles, almost all of their miles will be covered by the higher rates, and it is still open to employers with employees who drive many more miles to set their own rates if they wish. I would just note that the Conservative party had many opportunities to uprate these mileage rates after 2011, when they did do so, but they demurred from that choice for 13 years in a row, and I am very glad to be part of a Government who have introduced the largest increase in a very long time, if not ever.

The changes made by clause 2 will provide immediate support for both employees and the self-employed, and this is on top of the universal support announced in May, including the freeze on fuel duty, which will save motorists 11p per litre compared to previous plans, or £120 for the average car, or £250 for the average van. This clause represents the largest ever increase to these mileage rates, benefiting around 2 million employees and 1 million self-employed individuals, saving over £120 a year for a worker doing 6,000 business miles.

Clause 3 reduces the vehicle excise duty liability for the majority of heavy goods vehicles to £1 for 12 months for licences taken out from today until 30 June 2027. The changes made by this clause are in recognition of the key role that the road haulage sector plays in transporting goods 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 conflict in the middle east from spreading across the economy. The shadow Exchequer Secretary is right to point out that this measure on its own is not a silver bullet in helping the haulage sector, but I hope that it will provide some assistance, and it does show very clearly by our reducing this rate down to £1, saving HGVs £600 a year, that this is a sector that we do want to support and see grow and weather the storm from the conflicts in the middle east. We also want to do all we can to reduce costs in the supply chain, to keep prices in the shops for everyday families as low as possible. The decisions taken since the 2024 general election to freeze fuel duty will save the average HGV over £2,000.

With that, having taken the Committee through the three clauses, I look forward to hearing the contributions from other Members.

[The First Deputy Chairman of Ways and Means (Judith Cummins)]

I call the shadow Minister.

--- Later in debate ---

[Daisy Cooper (St Albans) (LD)]

I rise to speak to new clauses 1 to 3. New clause 1 would require the Chancellor to publish a report on the use of additional receipts arising from the increase in the electricity generator levy from 45% to 55%. New clause 2 would require the Chancellor to review the adequacy of the approved mileage allowance payment rate set under clause 2 in respect of care workers using a personal vehicle in connection with their employment. New clause 3 would require the Chancellor to publish an assessment of the combined impact on haulage costs and consumer prices of the temporary vehicle excise duty rates for goods vehicles.

As I indicated on Second Reading, we support what the Government are trying to do with these measures. However, it is really important for trust in politics that when Ministers stand at the Dispatch Box and say that the intention is to use the levy to supporting households and businesses with the cost of living, there is a report to demonstrate to the public that the money does, in fact, go towards measures that do just that, rather than the money disappearing into Treasury coffers. I urge the Exchequer Secretary to accept new clause 1, which would provide transparency to Parliament and the public.

Let me turn to new clause 2. Some Members will know that I have spoken repeatedly in this House about the extraordinary work carried out by our care workers. The salary of our care workers, and the status they are given, is nowhere near big enough to recognise the extraordinary work that they do. I have spent several hours with Abbots Care in my constituency, watching how their care workers work. They have an enormous emotional investment in every single client; they observe their habits and personality, and they know when something is slightly out of whack or not quite right. A care worker’s routine can suddenly change if there an emergency with another client. There may be something wrong with the client’s medication and they have to make phone calls that they had not expected to make. They are experts on their client and on people, but they are not experts on tax.

I was very heartened that the Exchequer Secretary said on Second Reading that employees who do not receive the mileage allowance can claim back an equivalent amount. I was also heartened to hear him say that he would look into ways to make it easier for care workers. Could he outline what those measures might look like? We owe care workers so much thanks for the work that they do. It is diligent, hard work to make sure that our loved ones are cared for and can live with dignity. We should make the system as simple as possible for them. It might be a case of care organisations and providers sending letters to care workers to tell them what they are entitled to, or it might be a case of requiring HMRC to proactively write to them, but we must bend over backwards to make sure that care workers can benefit from this particular measure.

As I said on Second Reading, we welcome the measure, but we urge Ministers to think very carefully and to go as far as they can to make sure that every care worker who is entitled to this benefit understands that it is there for them. It must be made as simple as possible for care workers, and we must make it clear that it will not end up in a drawn-out dispute with HMRC; I urge the Exchequer Secretary to think about a dedicated hotline for care workers, in case we need one down the line. Finally, new clause 3 requires a report on this particular measure.

Our three new clauses are all transparency measures, and I hope that the Government will look favourably on them.

[Dan Tomlinson]

I thank the shadow Exchequer Secretary, the hon. Member for North West Norfolk (James Wild), and the hon. Member for St Albans (Daisy Cooper), for their scrutiny and attention to the measures contained in this short Bill. I am proud that, as the shadow Exchequer Secretary said, we removed three taxes, and I am glad to say that, on a temporary basis at least, one tax is being put down to £1 as a result of the legislative changes that the House is about to vote on. It is a privilege to close this brief debate on behalf of the Government.

Let me turn to each amendment. New clause 2 would require a report to the House of Commons on the approved mileage allowance payments system, including the adequacy of the rate for care workers. The hon. Member for St Albans spoke powerfully about the work done by care workers in her constituency, who she has the honour of representing. I think that all Members will know—from personal experience of family members who have either worked in the sector or been cared for by those who work in the sector—just how valuable care workers’ time, effort and care is.

I am glad that the hon. Lady is now aware that care workers can claim back the tax. They cannot claim back the whole amount—it is not fully equivalent—but they can claim back the tax relief, as it were, on the amount. I want to look at whether we can make that process simpler and easier to use. As the Department does so, I would be happy to provide further updates—if not at the Budget, then beforehand. We have said that the Government’s review of the rates is not over. We came forward with the 10p increase, and we are continuing the review and will update the House further at the Budget. I therefore urge Members to reject this new clause.

New clause 3 would require a report to the House on the impact of haulage costs and consumer prices, including the operating costs for and overall tax burden on goods vehicle operators. As I am sure the shadow Exchequer Secretary and the Liberal Democrat spokesperson will know, the Government have already published a tax impact and information note setting out the expected impact of the measure. The costing for it will be subject to scrutiny by the Office for Budget Responsibility and set out at a future fiscal event. It is therefore the Government’s view that the new clause is unnecessary.

New clause 4 would require the Treasury to review the impact of the EGL rate rise, including on investment, electricity prices and energy security, and to report to Parliament by 31 March 2028. The EGL was carefully designed to avoid disincentivising renewable generation, which means that since its introduction in 2023 it has had no adverse effect on energy security or new investment; in fact, we are having record levels of new investment in renewables under this Government. It is worth noting that new investments made since 2023 are exempt from the EGL and will continue to be so.

The Government have published a tax information and impact note on this measure, too, which sets out clearly that the Government’s view is that this rate rise is not expected to have an impact on electricity prices or investment in renewable generation going forward. The note also explains the rationale for the new EGL, which we have discussed. I will be consistent in reminding the Committee that, of course, the Government keep all taxes under review and monitor and evaluate tax policy changes on an ongoing basis, and that, unless responding to international conflict, in order to be there for households and businesses, tax policy decisions are usually best made by Chancellors at the Budget in the usual way.

--- Later in debate ---

[James Wild]

I am happy to clarify that for the Minister. My point was rather that if the Government are to introduce a higher levy rate on the basis that it will incentivise people to move into wholesale contracts for difference, it might be as well to have the policy for those wholesale contracts for difference ready.

[Dan Tomlinson]

I thank the shadow Exchequer Secretary for that. As I said, we are consulting on that policy before the end of the year. It was the Chancellor’s and this Government’s decision that the better thing to do for the country—for businesses and for households—was to respond to the conflict in the middle east with pace and appropriate responsiveness rather than waiting until the next fiscal event, which is scheduled for the autumn.

I turn to new clause 5, which would require a report to the House of Commons on the impact of the measure on UK public finances, the competitiveness of the UK freight and logistics sector and the contribution of the temporary VED rate to efficient supply chains, and whether the measure remains appropriate beyond the next 12 months. As always, taxes and reliefs will be looked at ahead of the next fiscal event in the context of the public finances. Consistent with the Chancellor’s approach, this is a targeted and time-limited intervention in response to the conflict in the middle east, in recognition of the key role that the road haulage sector plays in transporting goods—including food—across the UK and its disproportionate exposure to fuel costs. The Government will continue to monitor the situation and consider further action as and if that may be necessary. As on other measures, the Government have already published a tax impact and information note, and the costing for the measure will be subject to scrutiny by the Office for Budget Responsibility.

Finally, the shadow Exchequer Secretary talked of this measure as a short-term fix. I hope he is aware of and has seen the impact of the long-term decisions that the Government have made over our time in office to ensure that we can have higher economic growth, as we have had, and higher living standards—rather than their falling by 2%, as they did in the previous Parliament, they have already risen so far by 2% in this Parliament—in part because we have brought back economic stability and had wages rising faster than inflation in every single month since we took office. That has supported stability in the economy which has delivered six interest rate cuts. We have made sure that we are increasing capital investment and that we work with the private sector to get growth up and to invest in our public services and important infrastructure. We have done that in a way, along with investing in our NHS, that has enabled us to manage the public finances well and get borrowing falling in every year of this forecast, with the deficit lower than the G7 average, which the previous Conservative Government never achieved, despite how much they talked about it. They talked a good game on the public finances, but they were never able to deliver that. I therefore ask the Committee to reject the new clause.

For the reasons that I have set out, I urge hon. Members to reject the amendments tabled by the Opposition. I commend the clauses in this short and well-formed Bill to the Committee.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 4 ordered to stand part of the Bill.

New Clause 2

Approved mileage allowance payments: review of rate for care workers

“(1) Within six months of the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a review of the adequacy of the approved mileage allowance payment rate set under section 2 in respect of care workers using a personal vehicle in connection with their employment.

(2) The review under subsection (1) must consider—

(a) whether the rate of 55 pence per mile adequately reflects the costs incurred by paid care workers when travelling between the homes of those for whom they provide care;

(b) the merits of setting a higher approved rate for paid care workers who are required to transport specialist equipment, medication or mobility aids in connection with their caring responsibilities;

(c) the merits of setting a higher approved rate for paid care workers who make three or more separate care visits in a single day; and

(d) the interaction between mileage reimbursement practices in the social care sector and the effective hourly rate received by paid care workers relative to the National Living Wage.

(3) In preparing the review under subsection (1), the Chancellor of the Exchequer must consult—

(a) representatives of paid care workers;

(b) representatives of employers in the social care sector; and

(c) such other persons as the Chancellor considers appropriate.

(4) In this section “care worker” means a person employed to provide personal care to individuals in their own homes, whether employed directly or through a domiciliary care agency.”—(Daisy Cooper.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Dan Tomlinson]

I beg to move, That the Bill be now read the Third time.

I am grateful for the discussion that we have had today on a Bill that responds directly to the pressures placed on people and businesses across the UK by the conflict in the middle east. In respect of energy, rising gas prices have driven up electricity prices, and non-gas generators stand to benefit significantly as a result. The electricity generator levy ensures that a share of this exceptional revenue is redirected to the public, and we are increasing that share by raising the rate of the levy from 45% to 55%. As for fuel costs, we are uprating mileage rates for the first time in 15 years, providing relief for millions. We are also introducing a 12-month vehicle excise duty holiday for the majority of heavy goods vehicles, supporting those who drive for work and the transport of goods across the UK. Those three measures are the right measures at the right time, and I commend the Bill to the House.

--- Later in debate ---

[Dan Tomlinson]

I ask that the House gives the Bill its Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Taxation (Energy and Vehicles) Bill

Dan Tomlinson Excerpts

2nd reading & Committee of the whole House
Wednesday 1st July 2026 Commons Chamber

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

Today’s debate is progressing rapidly—so rapidly, in fact, that I am yet to turn to the speech in my folder. It is a privilege to close this rapid debate on behalf of the Government, and I thank Members for their contributions, as well as the Economic Secretary to the Treasury for opening the Government’s arguments. She was right to point out that the conflict in the middle east has imposed additional costs on the British people, which is why the Chancellor and the Prime Minister have been careful throughout the conflict—from the beginning, when other parties took a different approach—to tread carefully, be cautious and not rush to entangle ourselves in a foreign conflict, risking national security and potentially further harming our economic security.

The measures we are considering are an example of how the Government have responded in a proactive and positive way to the impact of the conflict in the middle east on households, families and businesses. Reasonable people can disagree about how the Government could have best responded to the conflict as it played out. It is this Government’s judgment that we have taken the right approach to ensure that we support those families and businesses that most need it. We have been there for them with the changes in this Bill and others—either already passed or making their way through the House via instruments of some form—such as continuing the freeze in fuel duty.

We wanted to ensure that our response was proportionate and targeted so that we could continue on the path that this Government have set out to bring down the deficit and bring down borrowing sustainably over the course of this Parliament. This year, for the first time since the 2000s, we have a lower deficit than the G7 average—something that the Conservatives never managed to achieve, despite all their talk about wanting to manage the public finances well.

I will not run through the measures in detail, as my hon. Friend the Economic Secretary to the Treasury has already done so. Instead, I will take the chance to respond to the questions asked by Opposition spokespeople.

I can confirm that the consultation on the electricity generator levy will come before the end of this year. It is being worked on at the moment by officials in the Department for Energy Security and Net Zero. We will ensure that we consult on this at the end of the year. Questions such as auction allocation and details of the way the wholesale contracts for difference will work will, I am sure, be raised in the consultation or elsewhere in engagement.

[James Wild]

Given that the levy kicks in from today and the Minister said that the consultation will be published before the end of the year, six months henceforth, and then legislation will have to go through, are the Government considering any backdating provision? If a company generator wanted to go into one of these wholesale CfDs, doing so would allow it to have that backdated; at the moment, it would not have the option to go into the wholesale and will just be hit with the higher levy.

[Dan Tomlinson]

No. If prices are slightly above the threshold set in the electricity generator levy, as they are at the moment, I believe, those taxes will be due now, from 1 July, whether or not businesses make decisions down the line after the consultation, after engagement and after the detail of the wholesale contract for difference policy has been set out by the DESNZ Secretary of State.

Both the shadow Exchequer Secretary and the hon. Member for St Albans (Daisy Cooper) asked how much revenue will be raised by this and other measures. It is a good tradition—a tradition set in place, in fact, by the Conservatives and Liberal Democrats—that the Office for Budget Responsibility set out the costings of policy decisions when they are made. That is important. This Government and this Chancellor have been keen to protect the independence and integrity of the OBR, rather than throwing it under the bus and causing market turmoil, as Liz Truss did. At the Budget later this year, the OBR will, in the usual way, confirm the costings of the changes announced by the Chancellor and included in the Bill.

The shadow Exchequer Secretary is right that the costings the OBR put out initially on the EGL ended up being very different from the revenue that it has pulled in. That is why it is right that we have an independent forecaster, so that even if things materialise differently than was forecast, we have forecasts that are robust to the information at the time and can be relied on by all.

The hon. Gentleman questions whether the Government have provided sufficient support more broadly. I would just mention that we have taken the decision to extend the fuel duty freeze. Going into the general election, the previous Government’s plan, as set out by the OBR, which we have already talked about, was for fuel duty to continue to rise and for the 5p cut to unwind. I believe that motorists would be paying a further 11p of fuel duty if it was not for their choice in 2024 to elect a Labour Government and not go ahead with the plans that the Conservatives set out.

A couple more points have been raised. The shadow Minister mentions a review of indexation. We will, of course, keep the mileage rates under review. The Chancellor announced a few weeks back that we will have a review. We have somewhat pre-empted that with this 10p increase, because we wanted to respond to the conflict in the middle east and the impact on households, but that review is still ongoing and will report if further changes are to be made to the policy at the Budget.

The Liberal Democrat spokesperson made the important point that many care workers and people who drive for work may be working for an employer who does not provide a mileage rate. It is not compulsory for employers to set the rate at the HMRC rates. We have increased rates from 45p per mile to 55p per mile up to 10,000 miles, and I encourage employers across the country to adopt that higher rate.

For employees who work for an employer who does not do so or who persists in having a significantly lower rate, as I am aware that some do, it is possible to claim back marginal tax up to that amount, so 55p per mile now. A basic rate taxpayer can in effect get 20% back on that. It was a pleasure to meet care workers and members of Unison, the trade union, a couple of weeks ago at No. 11 Downing Street. Some questions were raised about whether that process could be made any easier for workers to navigate, and that is something I certainly want to look at with my officials. This is a complex area of policy. I encourage Members to inform care workers and others who drive for work and who do not have mileage rates provided by their employer that they can claim the tax back from HMRC.

I hope that responds to many of the points made.

[James Wild]

I think the Minister might be coming to a conclusion, and I would not want him to miss the opportunity to refer to the House of Lords Constitution Committee and the presumption that fast-tracked legislation should include sunset clauses. Could he explain why the Government have chosen not to follow that guidance in this case?

[Dan Tomlinson]

There is a very sensible policy rationale when it comes to the electricity generator levy, which I think is the clause the hon. Member is referring to. We want to ensure that the ending of the EGL and the future decisions made on it are made in the light of the decisions that will be made on the wholesale contracts for difference, which, as I have said, are coming forward. It would not have been the right decision to pick a future end date without considering how it would interact with the decisions that the Government will make and will be consulting on later this year on the detail of the wholesale contracts for difference.

I hope that that has responded to many, if not all, of the points that have been raised by Opposition Members. I encourage Members to support the Bill.

Question put and agreed to.

Bill accordingly read a Second time.

Horizon Family Members Redress Scheme

Dan Tomlinson Excerpts

Tuesday 30th June 2026 Written Statements

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

The Under-Secretary of State for Business and Trade, my hon. Friend the Member for East Renfrewshire (Blair McDougall), announced the Horizon family members redress scheme on 19 March 2026. The scheme offers redress to close family members of postmasters whose lives were significantly affected by failures in the Horizon IT system.

The Government are committed to ensuring that family members of postmasters receive their compensation with minimal administrative burden and will legislate to formalise tax exemptions shortly, ensuring that no income tax or capital gains tax will be payable for redress received related to this scheme. The legislation will also relieve these payments from inheritance tax. Existing legislation ensures that national insurance contributions will not be due.

[HCWS164]