Asked by: Edward Morello (Liberal Democrat - West Dorset)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment her Department has made of the potential impact of (a) business rates and (b) VAT on the financial sustainability of hotels in (i) rural areas and (ii) West Dorset constituency.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government recognises the significant contribution made by hospitality and tourism businesses, including those in rural areas, to economic growth and social life in the UK.
To deliver our manifesto pledge, from 2026/27, we intend to introduce permanently lower tax rates for retail, hospitality, and leisure (RHL) properties, including hotels, with rateable values below £500,000. This permanent tax cut will ensure that they benefit from much-needed certainty and support.
Ahead of these new multipliers being introduced, the Government recognises that businesses will need support in 2025/26. As such, we prevented the current RHL relief from ending in April 2025, extending it for one year at 40 per cent up to a cash cap of £110,000 per business, and we froze the small business multiplier.
When the new, permanently lower tax rates are set at Budget 2025, the Treasury intends to publish analysis of the effects of the new multiplier arrangements.
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. The UK’s VAT rate of 20 per cent is close to the OECD average of 19.3 per cent. The UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD, at £90,000. This keeps the majority of businesses out of the VAT regime altogether.
Asked by: Edward Morello (Liberal Democrat - West Dorset)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of reducing wine duty to 14 per cent on British wine producers.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The wine industry makes a vital contribution to our economy and society. We also know the sector has found economic conditions challenging over the past few years, in part due to the pandemic, energy costs, and the cost-of-living crisis.
As you know, a cut, or even a freeze, to alcohol duty represents a cost to the Exchequer. The baseline assumption is that alcohol duty will be increased annually, so that it does not fall in real terms. As with all taxes, the Government welcomes representations from stakeholders to inform policy development.
Asked by: Edward Morello (Liberal Democrat - West Dorset)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department plans to review duty relief schemes to support the growth of British wine production.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The wine industry makes a vital contribution to our economy and society.
Draught Relief allows products served on draught to benefit from a lower rate of alcohol duty, providing vital support to producers, pubs and other venues.
Small Producer Relief supports smaller firms and new entrants by providing a reduced duty rate for those who make 4,500 hectolitres or less of alcohol per year.
While wine producers can benefit from these reliefs, both are limited to products below 8.5 per cent alcohol by volume (ABV), in line with the principle underpinning the reformed alcohol duty system that stronger alcoholic drinks should pay more duty.
The Chancellor makes decisions on tax policy at fiscal events, and the Government welcomes representations from the wine sector in advance of the Budget.
Asked by: Edward Morello (Liberal Democrat - West Dorset)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of enabling people to Gift Aid donations made to certified carbon offsetting projects.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government recognises the vital role played by the charity sector and the generosity of the British public. That is why we supported charitable giving with over £1.7billion in Gift Aid in tax year 2025.
Donations to UK registered charities recognised by HMRC, that are involved in or run certified carbon credit projects, are already allowable for Gift Aid, an example being ‘The Woodland Trust’.
The UK Government is a strong supporter of the responsible voluntary use of high-integrity carbon and nature credits as part of climate and nature strategies. This commitment is reflected in the launch of the Principles for Voluntary Carbon and Nature Market Integrity and the government consultation which closed in July on their operationalisation, which will further the UK's ambition to become the green finance capital of the world.
Asked by: Edward Morello (Liberal Democrat - West Dorset)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions her Department has had with mortgage providers on access to finance for ex-Right to Buy properties.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
HM Treasury is regularly in contact with mortgage lenders on all aspects of their mortgage business to understand their position and current lending conditions. However, the pricing of mortgages, including the availability of mortgage finance for particular properties, is a commercial decision for lenders in which the Government does not intervene.
I would encourage any prospective homeowner to shop around and speak to a mortgage broker in order to find the best possible mortgage product for their circumstances.
Asked by: Edward Morello (Liberal Democrat - West Dorset)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps her Department is taking to support people facing difficulties in obtaining mortgages for ex-Right to Buy properties.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
HM Treasury is regularly in contact with mortgage lenders on all aspects of their mortgage business to understand their position and current lending conditions. However, the pricing of mortgages, including the availability of mortgage finance for particular properties, is a commercial decision for lenders in which the Government does not intervene.
I would encourage any prospective homeowner to shop around and speak to a mortgage broker in order to find the best possible mortgage product for their circumstances.
Asked by: Edward Morello (Liberal Democrat - West Dorset)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential impact of charging VAT on carbon offset donations on levels of public engagement with climate action.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Payments that are freely given without the expectation of receiving something in return are not in the scope of VAT. This is a fundamental principle of how VAT operates. Donations made to carbon projects are outside the scope of VAT. This means that VAT should not be charged on carbon offset donations. There are no plans to change this position.
Asked by: Edward Morello (Liberal Democrat - West Dorset)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make it her policy to exempt donations to verified carbon offsetting projects from VAT.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Payments that are made voluntarily, without expectation of receiving goods or services in return, fall outside the scope of VAT. This is a core principle of the VAT system. As such, donations to verified carbon offsetting projects are not subject to VAT, and VAT should not be charged on these donations.
Asked by: Edward Morello (Liberal Democrat - West Dorset)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential impact of anti-money laundering compliance requirements on the financial viability of small and medium-sized law firms.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
I refer the hon. Member to the answer to UIN 67269.
Asked by: Edward Morello (Liberal Democrat - West Dorset)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions she has had with the Financial Conduct Authority on the adequacy of its money laundering risk management policies.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
The government meets regularly with the Financial Conduct Authority (FCA) to discuss a range of topics. The FCA is required under the Money Laundering Regulations (MLRs) to assess the risks of money laundering for the businesses it supervises for compliance with the MLRs; to maintain risk profiles for these businesses; and to take a risk-based approach to supervision. The Treasury collects a range of information from the FCA to evaluate its approach to managing money laundering risk and publishes it as part of the annual report on anti-money laundering and counter-terrorist financing supervision. The latest annual report is available here: https://www.gov.uk/government/publications/anti-money-laundering-and-countering-the-financing-of-terrorism-supervision-report-2023-24