Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to her Department’s press release entitled Act now: 864,000 sole traders and landlords face new tax rules in two months, published on 5 February 2026, whether HMRC has undertaken an equality impact assessment of the implementation of Making Tax Digital for Income Tax on older and digitally excluded sole traders and landlords.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
HMRC has been accepting applications for exemption from Making Tax Digital (MTD) for Income Tax since 29 September 2025.
As of 31 January 2026, we have received 1,271 applications for exemption from MTD for Income Tax on the grounds of digital exclusion.
As of 31 January 2026, decisions had been made on 881 applications, with 661 granted exemptions from the MTD for Income Tax requirements.
HMRC has assessed the potential impact of MTD for Income Tax the potential impact of MTD for Income Tax on compliance costs and administrative requirements across different customer groups, including self-employed individuals, small businesses, and landlords.
The latest published assessment is available at: Extension of Making Tax Digital for Income Tax Self Assessment to sole traders and landlords - GOV.UK
Equalities are also considered as part of this impacting. The government is clear that where a taxpayer cannot use MTD for Income Tax, for example due to age or disability, they can apply for exemption from the MTD requirements.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to her Department’s press release entitled Act now: 864,000 sole traders and landlords face new tax rules in two months, published on 5 February 2026, what analysis has been conducted on the potential costs to small businesses of the transition to digital tax reporting under Making Tax Digital for Income Tax.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
HMRC has been accepting applications for exemption from Making Tax Digital (MTD) for Income Tax since 29 September 2025.
As of 31 January 2026, we have received 1,271 applications for exemption from MTD for Income Tax on the grounds of digital exclusion.
As of 31 January 2026, decisions had been made on 881 applications, with 661 granted exemptions from the MTD for Income Tax requirements.
HMRC has assessed the potential impact of MTD for Income Tax the potential impact of MTD for Income Tax on compliance costs and administrative requirements across different customer groups, including self-employed individuals, small businesses, and landlords.
The latest published assessment is available at: Extension of Making Tax Digital for Income Tax Self Assessment to sole traders and landlords - GOV.UK
Equalities are also considered as part of this impacting. The government is clear that where a taxpayer cannot use MTD for Income Tax, for example due to age or disability, they can apply for exemption from the MTD requirements.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to her Department’s press release entitled, Act now: 864,000 sole traders and landlords face new tax rules in two months, published on 5 February 2026, what proportion of exemption requests for those who cannot use digital tools has been rejected.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
HMRC has been accepting applications for exemption from Making Tax Digital (MTD) for Income Tax since 29 September 2025.
As of 31 January 2026, we have received 1,271 applications for exemption from MTD for Income Tax on the grounds of digital exclusion.
As of 31 January 2026, decisions had been made on 881 applications, with 661 granted exemptions from the MTD for Income Tax requirements.
HMRC has assessed the potential impact of MTD for Income Tax the potential impact of MTD for Income Tax on compliance costs and administrative requirements across different customer groups, including self-employed individuals, small businesses, and landlords.
The latest published assessment is available at: Extension of Making Tax Digital for Income Tax Self Assessment to sole traders and landlords - GOV.UK
Equalities are also considered as part of this impacting. The government is clear that where a taxpayer cannot use MTD for Income Tax, for example due to age or disability, they can apply for exemption from the MTD requirements.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to her Department’s press release entitled, Act now: 864,000 sole traders and landlords face new tax rules in two months, published on 5 February 2026, how many exemption requests for those who cannot use digital tools HMRC has received to date.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
HMRC has been accepting applications for exemption from Making Tax Digital (MTD) for Income Tax since 29 September 2025.
As of 31 January 2026, we have received 1,271 applications for exemption from MTD for Income Tax on the grounds of digital exclusion.
As of 31 January 2026, decisions had been made on 881 applications, with 661 granted exemptions from the MTD for Income Tax requirements.
HMRC has assessed the potential impact of MTD for Income Tax the potential impact of MTD for Income Tax on compliance costs and administrative requirements across different customer groups, including self-employed individuals, small businesses, and landlords.
The latest published assessment is available at: Extension of Making Tax Digital for Income Tax Self Assessment to sole traders and landlords - GOV.UK
Equalities are also considered as part of this impacting. The government is clear that where a taxpayer cannot use MTD for Income Tax, for example due to age or disability, they can apply for exemption from the MTD requirements.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to her Department’s press release entitled Act now: 864,000 sole traders and landlords face new tax rules in two months, published on 5 February 2026, what assessment she has made of the potential impact of the requirement to maintain digital records and submit quarterly tax updates under Making Tax Digital for Income Tax on sole traders and landlords.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The government is undertaking a range of activities to ensure those needing to use Making Tax Digital (MTD) for Income Tax from April 2026 are ready and able to do so successfully.
This includes targeted media campaigns, awareness letters, developing guidance, and working with the software industry to ensure a broad range of MTD‑compatible products is available, to suit different needs and budgets. Free options will support those with the simplest affairs.
MTD will help businesses and landlords keep on top of their tax affairs. It places small businesses on a more digital footing, with digital tools helping to reduce errors and making annual tax returns easier.
HMRC’s latest published assessment of the potential impact of MTD for Income Tax across different taxpayer groups is available at:
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to her Department’s press release entitled Act now: 864,000 sole traders and landlords face new tax rules in two months, published on 5 February 2026, what assessment she has made of the adequacy of awareness of the the new Making Tax Digital for income tax rules among sole traders and landlords.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The government is undertaking a range of activities to ensure those needing to use Making Tax Digital (MTD) for Income Tax from April 2026 are ready and able to do so successfully.
This includes targeted media campaigns, awareness letters, developing guidance, and working with the software industry to ensure a broad range of MTD‑compatible products is available, to suit different needs and budgets. Free options will support those with the simplest affairs.
MTD will help businesses and landlords keep on top of their tax affairs. It places small businesses on a more digital footing, with digital tools helping to reduce errors and making annual tax returns easier.
HMRC’s latest published assessment of the potential impact of MTD for Income Tax across different taxpayer groups is available at:
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to her Department’s press release entitled Act now: 864,000 sole traders and landlords face new tax rules in two months, published on 5 February 2026, what steps HM Revenue and Customs is taking to ensure that sole traders and landlords impacted by the new Making Tax Digital for Income Tax rules are aware of their obligations.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The government is undertaking a range of activities to ensure those needing to use Making Tax Digital (MTD) for Income Tax from April 2026 are ready and able to do so successfully.
This includes targeted media campaigns, awareness letters, developing guidance, and working with the software industry to ensure a broad range of MTD‑compatible products is available, to suit different needs and budgets. Free options will support those with the simplest affairs.
MTD will help businesses and landlords keep on top of their tax affairs. It places small businesses on a more digital footing, with digital tools helping to reduce errors and making annual tax returns easier.
HMRC’s latest published assessment of the potential impact of MTD for Income Tax across different taxpayer groups is available at:
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department has made an assessment of the potential impact of the tax treatment of the State Pension and Pension Credit on the relative incomes of pensioners.
Answered by Torsten Bell - Parliamentary Secretary (HM Treasury)
The Government is committed to making sure older people can live with the dignity and respect they deserve in retirement. The State Pension will remain the foundation of retirement income. In line with the Government’s commitment to the Triple Lock for the duration of this parliament, over 12 million pensioners will benefit from a 4.8% increase to their basic or new State Pension in April 2026, worth up to £575 a year. This follows a substantial increase in 2025/26, when those on the full new State Pension received a £360 boost.
The Pension Credit Standard Minimum Guarantee will also increase by 4.8% in April 2026, from £227.10 to £238 a week for single pensioners and from £346.60 to £363.25 for couples, protecting the poorest pensioners. Pension Credit is not subject to income tax.
Pension income, whether State or occupational, is a form of income like earnings and, as such, is taxable, subject to any personal tax allowances. The vast majority of pensioners paid tax under the previous Government, with 8.3 million taxpayers over State Pension age in 2024/2025.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of tax, including a) Vehicle Excise Duty, b) VAT on vehicle purchases and c) fuel duty on motorists.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Revenue from motoring taxes helps to fund vital public services and infrastructure, including investment in roads and transport. The Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy, including considering the impact on households and businesses. The Chancellor makes decisions on tax policy at fiscal events in the context of the public finances.
At Budget 2025, the Government made a number of announcements relating to motoring tax. This included announcing continued support for people and businesses by extending the temporary 5p fuel duty cut until the end of August 2026. Rates will then gradually return to early 2022 levels. The planned increase in line with inflation for 2026-27 will not take place, with the Government uprating fuel duty rates by RPI from April 2027. This will save the average car driver £49 next year compared to previous plans.
The Government also announced the introduction of Electric Vehicle Excise Duty (eVED) from April 2028, a new mileage charge for electric and plug-in hybrid cars, recognising that EVs contribute to congestion and wear and tear on the roads but pay no equivalent to fuel duty.
The Government is taking a proportionate approach to ensuring electric car drivers pay an appropriate share whilst remaining firmly committed to supporting the transition to EVs. That is why the rate will be set at 50% of the equivalent fuel duty cost for petrol and diesel cars, and 80% of eVED revenue from the first three years is being reinvested to extend support for EVs and the auto manufacturing industry. This builds on existing generous support, including Company Car Tax incentives.
Asked by: James McMurdock (Independent - South Basildon and East Thurrock)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of Vehicle Excise Duty rates on the uptake of electric vehicles.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Revenue from motoring taxes helps to fund vital public services and infrastructure, including investment in roads and transport. The Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy, including considering the impact on households and businesses. The Chancellor makes decisions on tax policy at fiscal events in the context of the public finances.
At Budget 2025, the Government made a number of announcements relating to motoring tax. This included announcing continued support for people and businesses by extending the temporary 5p fuel duty cut until the end of August 2026. Rates will then gradually return to early 2022 levels. The planned increase in line with inflation for 2026-27 will not take place, with the Government uprating fuel duty rates by RPI from April 2027. This will save the average car driver £49 next year compared to previous plans.
The Government also announced the introduction of Electric Vehicle Excise Duty (eVED) from April 2028, a new mileage charge for electric and plug-in hybrid cars, recognising that EVs contribute to congestion and wear and tear on the roads but pay no equivalent to fuel duty.
The Government is taking a proportionate approach to ensuring electric car drivers pay an appropriate share whilst remaining firmly committed to supporting the transition to EVs. That is why the rate will be set at 50% of the equivalent fuel duty cost for petrol and diesel cars, and 80% of eVED revenue from the first three years is being reinvested to extend support for EVs and the auto manufacturing industry. This builds on existing generous support, including Company Car Tax incentives.