Asked by: Max Wilkinson (Liberal Democrat - Cheltenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of student loan repayment thresholds, tax thresholds and fiscal drag on incentives to work for people with plan 2 student loans.
Answered by James Murray - Chief Secretary to the Treasury
The Government is making fair and necessary choices on tax so it can deliver on the public’s priorities. Everyone is being asked to contribute to support these goals, but the Government is keeping the contribution as low as possible by pursuing a programme of reform to fix longstanding issues in the tax system – modernising it, and addressing unequal and unfair treatment, while ensuring the wealthiest contribute more.
Asked by: Max Wilkinson (Liberal Democrat - Cheltenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps her department is taking to change (i) the tax system and (ii) public sector funds to encourage further investment in start-ups and early stage companies.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government is committed to making the UK the best place to start and grow a business, recognising the importance of a competitive investment environment for economic growth.
The UK is already the best place in Europe to start a business, and Autumn Budget 2025 sets out measures which will unlock even more investment in UK entrepreneurs and innovators, including start-ups and early stage companies.
On tax, we are doubling the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) investment limits, and expanding eligibility for the Enterprise Management Incentive (EMI) scheme. These changes will encourage further investment in our most successful companies, and attract top talent to help companies grow.
On public finance, UK Research and Innovation (UKRI) will direct £7 billion to support innovative company growth, and, as a first step, Innovate UK will launch a £130 million Growth Catalyst programme to accelerate frontier firms. The British Business Bank (BBB) will increase annual deployment by two-thirds, aiming to unlock £26 billion of private capital alongside £13 billion in public funding, and enable up to £10 billion in small business lending through guarantees.
Together, these steps will strengthen the UK’s start-up and scale-up ecosystem, giving founders the confidence and capital to start here, scale here, and succeed here.
Asked by: Max Wilkinson (Liberal Democrat - Cheltenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the adequacy of the UK’s approach to VAT on hospitality compared with EU member states.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government recognises the significant contribution made by hospitality businesses to economic growth and social life in the UK.
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.
HMRC estimate that the cost of a 5 per cent reduced rate for accommodation, hospitality and tourist attractions would be around £13 billion this financial year. If the scope were also to include alcoholic beverages, the cost would be approximately £3 billion greater.
Asked by: Max Wilkinson (Liberal Democrat - Cheltenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has considered reviewing banding for vehicle excise duty based on emissions rather than registration date.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Different Vehicle Excise Duty (VED) rates apply to cars, vans, motorcycles and HGVs and the rate for each vehicle is calculated according to a range of factors, such as its date of first registration, weight, or CO2 emissions.
Since 2001, the VED system has encouraged the uptake of cars with low carbon dioxide (CO2) emissions to help meet the UK's legally binding climate targets. Cars first registered between 1 March 2001 and 31 March 2017 pay VED annually according to CO2 emissions.
From 1 April 2017, new cars pay a variable first year rate according to the emissions of the vehicle, with the most polluting currently paying over £5,400, and zero emission models currently pay £10. After the first year, most cars move to a standard annual rate, currently set at £195.
Asked by: Max Wilkinson (Liberal Democrat - Cheltenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the Financial Conduct Authority plans to (a) investigate and (b) report on whether all firms’ (i) flood and (ii) storm definitions comply with the Consumer Duty.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
This is a matter for the Financial Conduct Authority (FCA) which is operationally independent from government. The FCA will respond to the Member by letter, and a copy of this letter will be placed in the Library of the House of Commons.
Asked by: Max Wilkinson (Liberal Democrat - Cheltenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps her Department is taking to help prevent VAT fraud by (a) misrepresentation and (b) impersonation.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
Tax fraud undermines our economy, hurts legitimate businesses and robs our vital public services of much-needed funds. The Government is committed to tackling tax non-compliance through technology, operational interventions and policy change.
HMRC deploys advanced analytics and risk profiling to identify businesses that misrepresent their activities, turnover, or goods classification to gain VAT advantages, which are subject to targeted compliance interventions. The number of HMRC compliance officers will grow by an additional 5,500 by 2029/30 from July 2024 levels.
HMRC combines identity verification and registration checks using a range of risk indicators to prevent and detect impersonation. HMRC also uses a wide range of civil and criminal powers to tackle the criminal groups behind VAT fraud. The Government is investing to ensure HMRC can continue to improve resilience of its systems and improve the way customers engage securely with HMRC.
Asked by: Max Wilkinson (Liberal Democrat - Cheltenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential impact of lowering VAT on construction projects on town centre regeneration.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government supports town centre preservation and regeneration. In September, the Government launched an overarching Pride in Place programme, providing up to £5bn over 10 years to support almost 250 places. It will target investment to communities that need it most, addressing the visible decline on high streets and the wider public realm. Local areas will be able to invest in things like youth clubs, libraries, community grocers, cultural venues, and health and wellbeing services.
VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
Asked by: Max Wilkinson (Liberal Democrat - Cheltenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of potential impact of the Video Games Expenditure Credit on levels of (a) employment, (b) investment, (c) studio formation and (d) IP development.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government recognises the importance of the creative industries, including the key role they play in driving economic growth. Video games jobs are highly productive at nearly double the average national output, and technology developed by games businesses contributes an estimated £1.3 billion output to the UK economy each year.
Video games companies benefit from the Video Games Expenditure Credit, which provides a tax credit of 34 per cent on UK video games development costs.
It is too soon to conduct an assessment of VGEC’s impact given it was introduced on 1 January 2024, after which there will be a lag of at least 12 months as accounting periods end and corporation tax returns are filed. An evaluation of the Video Game Tax Relief (VGTR), which VGEC is replacing, was published in July 2017. It can be found here: https://www.gov.uk/government/publications/video-game-tax-relief-evaluation.
The government will continue to work with industry to monitor the VGEC and its effectiveness on an ongoing basis.
Asked by: Max Wilkinson (Liberal Democrat - Cheltenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many video games studios have received (a) Video Games Tax Relief and (b) Video Games Expenditure Credit since they were introduced.
Answered by Dan Tomlinson - Exchequer Secretary (HM Treasury)
The Government recognises the importance of the creative industries, including the key role they play in driving economic growth. Video games jobs are highly productive at nearly double the average national output, and technology developed by games businesses contributes an estimated £1.3 billion output to the UK economy each year.
Video games companies benefit from the Video Games Expenditure Credit (VGEC), which was introduced on 1 January 2024 and provides a tax credit of 34 per cent on UK video games development costs. All new games must claim VGEC from 1 April 2025 and VGTR will expire in April 2027.
HMRC publish annual creative industry tax relief statistics on gov.uk, that can be found here: https://www.gov.uk/government/collections/creative-industries-statistics
Asked by: Max Wilkinson (Liberal Democrat - Cheltenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps her Department to ensure that 5% of GDP is spent on defence before 2035.
Answered by James Murray - Chief Secretary to the Treasury
At the Spending Review, we set budgets taking ‘core’ defence spending to 2.6% by 2027; next Parliament we have an ambition to reach 3% when fiscal and economic conditions allow.
Additionally, under the new NATO Defence Investment Pledge, the government has committed to hitting a headline ambition of 5% of GDP in the Parliament after next (2035-36). The 5% will be split into 1.5% of defence and security related spending and 3.5% of core defence spending with the overall ambition, trajectory and split to be reviewed in 2029.
We will set out our plans for the next spending review period at Spending Review 2027.