Asked by: Tom Hayes (Labour - Bournemouth East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make it her policy to remove VAT for building refurbishment works when energy performance targets are met to incentivise retrofit.
Answered by James Murray - Chief Secretary to the Treasury
This Government is committed to improving the quality and sustainability of our housing stock, through improvements such as low carbon heating, insulation, solar panels, and batteries. This will be vital to making the UK more energy resilient and meeting our 2050 Net Zero commitment.
Installations of qualifying energy-saving materials in residential accommodation and buildings used solely for a charitable purpose benefit from a temporary VAT zero rate until March 2027, after which they will revert to the reduced rate of VAT at five per cent.
VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s second largest tax forecast to raise £171 billion in 2024/25. Taxation is a vital source of revenue that helps to fund vital public services.
One of the key considerations when assessing a new VAT relief is whether the cost saving is likely to be passed on to consumers. Evidence suggests that businesses only partially pass on any savings from lower VAT rates. In some cases, reliefs do not represent good value for money, as savings will not always be passed on to consumers.
The Government has no current plans to formally review the VAT treatment of building works. However, all taxes are kept under review as part of the tax policymaking process. The Chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances.
Asked by: Tom Hayes (Labour - Bournemouth East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will bring forward legislative proposals to amend Stamp Duty so that rates of duty depend on the energy performance of the property.
Answered by James Murray - Chief Secretary to the Treasury
Stamp Duty Land Tax (SDLT) is a transaction tax paid on the purchase of a property or land in England and Northern Ireland. The level at which purchasers of residential property start paying Stamp Duty Land Tax (SDLT) is currently £250,000 and this is due to revert to £125,000 on 1 April 2025. For first-time buyers, the nil-rate band is currently £425,000 and the purchase price limit for accessing the relief is currently £625,000. On 1 April 2025, these rates will revert to £300,000 and £500,000 respectively. Introducing incentives based on the energy performance of properties would add significant complexity to the operation of the current system. The Government therefore has no plans to introduce incentives based on the energy performance of properties.
The Government keeps all taxes under review as part of the usual tax policy making process and welcomes representations to help inform future decisions on tax policy. Any changes are generally announced at fiscal events, where decisions are taken in the round.
Asked by: Tom Hayes (Labour - Bournemouth East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make it her policy to allow improvements made to increase the energy performance rating of rental properties to be tax deductible against rental income.
Answered by James Murray - Chief Secretary to the Treasury
The Government currently offers several schemes to support landlords and tenants in improving energy efficiency, including VAT relief on Energy-Saving Materials (ESMs), the Boiler Upgrade Scheme (BUS) and the Home Upgrade Grant (HUG).
Repair or maintenance work which also improves the energy efficiency of a rented property is generally already a deductible expense.
Asked by: Tom Hayes (Labour - Bournemouth East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 7 October 2024 to Question 5458 on Film: Tax Allowances, whether she has a planned timetable for bringing forward legislative proposals on the Audio-Visual Expenditure Credit.
Answered by James Murray - Chief Secretary to the Treasury
The additional tax relief for visual effects costs has not been legislated. Tax policy announcements are normally made at fiscal events and the Chancellor will set out her Budget on 30 October.
Asked by: Tom Hayes (Labour - Bournemouth East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if her Department will bring forward the implementation of the five per cent increase in tax relief for UK visual effects in film and high-end TV, with UK visual effects costs exempt from the 80 per cent cap on qualifying expenditure, announced in the Spring Budget 2024, from 1 April 2025 to 1 January 2025.
Answered by James Murray - Chief Secretary to the Treasury
Qualifying visual effects costs in film and TV are already eligible for the Audio-Visual Expenditure Credit, which provides a tax credit worth 34% of a film or TV company’s production costs.
The previous Government announced that from 1 April 2025, UK visual effects costs in film and high-end TV will receive a 5% increase in Audio-Visual Expenditure Credit (AVEC). The previous Government also announced that the AVEC’s 80% cap on costs that may receive tax relief will be removed for UK visual effects costs.
The policy has not been legislated. The Government will provide an update as soon as it is able to do so.
Asked by: Tom Hayes (Labour - Bournemouth East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department plans to provide (a) tax relief and (b) other fiscal support for the visual effects sector.
Answered by James Murray - Chief Secretary to the Treasury
Qualifying visual effects costs in film and TV are already eligible for the Audio-Visual Expenditure Credit, which provides a tax credit worth 34% of a film or TV company’s production costs.
The previous Government announced that from 1 April 2025, UK visual effects costs in film and high-end TV will receive a 5% increase in Audio-Visual Expenditure Credit (AVEC). The previous Government also announced that the AVEC’s 80% cap on costs that may receive tax relief will be removed for UK visual effects costs.
The policy has not been legislated. The Government will provide an update as soon as it is able to do so.
Asked by: Tom Hayes (Labour - Bournemouth East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of increasing the Rent a Room Scheme tax-free earnings threshold.
Answered by James Murray - Chief Secretary to the Treasury
Rent a room relief provides an incentive for people to make spare rooms available for rent.
As with all aspects of the tax system, the Government will keep this under review.