Written questions by Dean.

Whether she has made an estimate of the (a) cost to HMRC of administering the Loan Charge since 2019 and (b) total amount recovered in that period; and what assessment she has made of the value for money of that policy.

At Budget 2024, the Government commissioned an independent review of the loan charge to bring the matter to a close for those affected, ensure fairness for all taxpayers and ensure that appropriate support is in place for those subject to the loan charge. The review was led by Ray McCann, a former President of the Chartered Institute of Taxation. The Government accepted the review’s conclusion that the loan charge was an extraordinary piece of Government policy which necessitated an exceptional response, and is now legislating a new settlement opportunity that will assist those who have not yet settled to do so. As a result, most individuals could see reductions of at least 50% in their outstanding loan charge liabilities, and an estimated 30% of individuals could have these liabilities written off entirely. To encourage more people to settle, the Government will write off the first £5,000 of liabilities in addition to the proposals put forward by Ray McCann. HMRC are committed to supporting people through this process and are working hard to give them certainty on their tax positions as quickly as possible. This includes a dedicated service to guide people through the settlement process and provide extra support for those who need it. HMRC can also provide reasonable adjustments to meet an individual’s needs.

What assessment her Department has made of the potential impact on of the Loan Charge on individuals subject to it; and whether governance mechanisms are in place for people in serious financial and personal distress.

At Budget 2024, the Government commissioned an independent review of the loan charge to bring the matter to a close for those affected, ensure fairness for all taxpayers and ensure that appropriate support is in place for those subject to the loan charge. The review was led by Ray McCann, a former President of the Chartered Institute of Taxation. The Government accepted the review’s conclusion that the loan charge was an extraordinary piece of Government policy which necessitated an exceptional response, and is now legislating a new settlement opportunity that will assist those who have not yet settled to do so. As a result, most individuals could see reductions of at least 50% in their outstanding loan charge liabilities, and an estimated 30% of individuals could have these liabilities written off entirely. To encourage more people to settle, the Government will write off the first £5,000 of liabilities in addition to the proposals put forward by Ray McCann. HMRC are committed to supporting people through this process and are working hard to give them certainty on their tax positions as quickly as possible. This includes a dedicated service to guide people through the settlement process and provide extra support for those who need it. HMRC can also provide reasonable adjustments to meet an individual’s needs.

What recent assessment her Department has made of the effectiveness of the Loan Charge in meeting its intended objectives; and whether she plans to review that policy.

At Budget 2024, the Government commissioned an independent review of the loan charge to bring the matter to a close for those affected, ensure fairness for all taxpayers and ensure that appropriate support is in place for those subject to the loan charge. The review was led by Ray McCann, a former President of the Chartered Institute of Taxation. The Government accepted the review’s conclusion that the loan charge was an extraordinary piece of Government policy which necessitated an exceptional response, and is now legislating a new settlement opportunity that will assist those who have not yet settled to do so. As a result, most individuals could see reductions of at least 50% in their outstanding loan charge liabilities, and an estimated 30% of individuals could have these liabilities written off entirely. To encourage more people to settle, the Government will write off the first £5,000 of liabilities in addition to the proposals put forward by Ray McCann. HMRC are committed to supporting people through this process and are working hard to give them certainty on their tax positions as quickly as possible. This includes a dedicated service to guide people through the settlement process and provide extra support for those who need it. HMRC can also provide reasonable adjustments to meet an individual’s needs.

What assessment she has made of the potential merits of extending online marketplace VAT liability rules to domestic sellers as a way to reduce fraud and close the tax gap.

The Government has and will continue to engage with stakeholders to understand the impact of any changes to online marketplace liability rules on both platforms and sellers. Certified analysis by the Office for Budget Responsibility (OBR) estimates the current online marketplace liability rules, together with the abolishment of Low Value Consignment relief, will raise £1.8 billion per annum by 2026-27. HMRC has an overall compliance strategy which focuses on addressing all forms of non-compliance. The most recent published VAT gap shows a continued downward trend, falling from 13.7% to 5.4% between tax years 2005/06 and 2023/24.

What assessment her Department has made of the relative value for money of reforming the Lifetime ISA compared with introducing a new product to replace it.

At Autumn Budget 25 the government announced that it will publish a consultation in early 2026 on the implementation of a new, simpler ISA product to support first time buyers to buy a home. Once available, this new product will be offered in place of the Lifetime ISA. The LISA was designed to help people save for both their first home and later life. A 2025 report by the Treasury Select Committee, however, concluded the dual purpose has made it unnecessarily complex and that ‘the Lifetime ISA may not be the most efficient use of taxpayers’ money to achieve those disparate objectives’. In addition, the provision of an upfront bonus requires a withdrawal charge for non-compliant withdrawals. HMRC have also conducted research into use of the Lifetime ISA which can be found here: Understanding the use of the Lifetime ISA: qualitative research - GOV.UK The new design will include the government bonus being paid at the point the individual makes a withdrawal for a house purchase. This removes the need for a withdrawal charge and means a saver can withdraw funds, should their circumstances change, without penalty. It will remain possible to open a Lifetime ISA until the new product becomes available and for account holders to continue to save into their Lifetime ISA in line with the existing rules indefinitely.

What assessment her Department has made of the potential merits of reforming the Lifetime ISA, rather than replacing it with a new product.

At Autumn Budget 25 the government announced that it will publish a consultation in early 2026 on the implementation of a new, simpler ISA product to support first time buyers to buy a home. Once available, this new product will be offered in place of the Lifetime ISA. The LISA was designed to help people save for both their first home and later life. The Treasury Select Committee‘s 2025 LISA inquiry concluded that this dual purpose has made it unnecessarily complex and that ‘the Lifetime ISA may not be the most efficient use of taxpayers’ money to achieve those disparate objectives’. The upfront bonus that requires a withdrawal charge for non-compliant withdrawals was highlighted as a specific concern. The new design will include the government bonus being paid at the point the individual makes a withdrawal for a house purchase. This removes the need for a withdrawal charge and means a saver can withdraw funds, should their circumstances change, without penalty. It will remain possible to open a Lifetime ISA until the new product becomes available and for account holders to continue to save into their Lifetime ISA in line with the existing rules indefinitely.

What assessment her Department has made of the potential impact on saving behaviour and consumer confidence of existing Lifetime ISA users arising from the introduction of a new product to replace the Lifetime ISA.

At Autumn Budget 25 the government announced that it will publish a consultation in early 2026 on the implementation of a new, simpler ISA product to support first time buyers to buy a home. Once available, this new product will be offered in place of the Lifetime ISA. The LISA was designed to help people save for both their first home and later life. The Treasury Select Committee‘s 2025 LISA inquiry concluded that this dual purpose has made it unnecessarily complex and that ‘the Lifetime ISA may not be the most efficient use of taxpayers’ money to achieve those disparate objectives’. The upfront bonus that requires a withdrawal charge for non-compliant withdrawals was highlighted as a specific concern. The new design will include the government bonus being paid at the point the individual makes a withdrawal for a house purchase. This removes the need for a withdrawal charge and means a saver can withdraw funds, should their circumstances change, without penalty. It will remain possible to open a Lifetime ISA until the new product becomes available and for account holders to continue to save into their Lifetime ISA in line with the existing rules indefinitely.

What assessment she has made of the adequacy of the restriction on tax relief for banks' compensation payments for motor finance compensation payments.

We are monitoring the redress situation closely and want to see it resolved in an efficient way that provides certainty for consumers and firms.In line with international norms, companies generally obtain Corporation Tax deductions for compensation payments, though the bank compensation restriction which was introduced as part of a wider bank tax regime, prevents banks from doing so.

Whether her Department considers the (a) have regard duty on the Financial Conduct Authority and (b) guidance provided in the Government’s remit letter, published on 14 November 2024, to be sufficient basis for the Financial Conduct Authority to take steps to support people with low financial resilience.

The Government recognises the key role the Financial Conduct Authority (FCA) has in improving financial inclusion for UK consumers. This is why the FCA is part of the Financial Inclusion Committee which has been convened to develop a Financial Inclusion Strategy. The membership of the committee reflects the fact that the whole financial inclusion ecosystem will need to work together for the strategy to be a success, including government, industry, consumer representatives, and the regulator. The strategy will be published later this year and will seek to tackle a range of barriers which prevent individuals from accessing the financial services and products they need. This will include actions for the FCA to take forward as part of their responsibilities within the sector, as well as relevant metrics to monitor the strategy’s progress. The Government will work closely with the FCA to deliver the strategy and regularly engages with the FCA on this topic at ministerial and official level. In November, the Chancellor also included reinforcing financial inclusion as a matter for the FCA to have regard to in her letter of recommendation. In response to this, Nikhil Rathi noted the FCA’s support for the development of the Financial Inclusion Strategy and its collaboration with partners to help build consumers’ financial resilience.

What outcomes her Department has set for the Financial Conduct Authority to deliver under the forthcoming National Financial Inclusion Strategy; and how will these be (a) measured and (b) reported.

The Government recognises the key role the Financial Conduct Authority (FCA) has in improving financial inclusion for UK consumers. This is why the FCA is part of the Financial Inclusion Committee which has been convened to develop a Financial Inclusion Strategy. The membership of the committee reflects the fact that the whole financial inclusion ecosystem will need to work together for the strategy to be a success, including government, industry, consumer representatives, and the regulator. The strategy will be published later this year and will seek to tackle a range of barriers which prevent individuals from accessing the financial services and products they need. This will include actions for the FCA to take forward as part of their responsibilities within the sector, as well as relevant metrics to monitor the strategy’s progress. The Government will work closely with the FCA to deliver the strategy and regularly engages with the FCA on this topic at ministerial and official level. In November, the Chancellor also included reinforcing financial inclusion as a matter for the FCA to have regard to in her letter of recommendation. In response to this, Nikhil Rathi noted the FCA’s support for the development of the Financial Inclusion Strategy and its collaboration with partners to help build consumers’ financial resilience.

Whether her Department plans to review the Trivial Benefit Allowance in advance of the Autumn Budget 2025.

There are a wide range of factors to take into consideration when introducing or widening a tax relief or exemption. These include how effective the exemption would be at achieving the policy intent, how targeted support would be and the cost. The Government keeps all taxes under review as part of the policy making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way.

What data her Department holds on (a) employer uptake of the Trivial Benefit Allowance and (b) the frequency of its use in employee reward schemes.

The requested data is not available. There is no tax paid on employee benefits covered by the Trivial Benefit Allowance and as such they are not required to be reported to HMRC.

What estimate she has made of the number of leasehold flats containing combustible material with higher insurance costs that will be classified as permanently impaired under the Basel 3.1 requirements; and if she will make a statement.

We understand the question relates to regulatory requirements for property valuations under Basel 3.1.There are several changes in the Prudential Regulation Authority’s (PRA) implementation of the Basel 3.1 standards that are relevant to mortgage valuation. Banks using the standardised approach to credit risk will have to update the valuation of mortgaged properties under specific circumstances such as if five years have passed since the valuation was last updated, when a borrower refinances their mortgage at the end of a fixed period, if modifications have been made to the property that unequivocally increase its value, or an event occurs that results in a likely permanent reduction in the property’s value (‘permanent impairment’).The PRA does not expect the changes to have a material impact on current industry practice for determining property valuations, including for properties with cladding, as the changes primarily relate to when a valuation for a given property is updated as opposed to how the valuation itself is determined.The government does not hold data on the number of properties, including for properties with cladding, that will be required to be re-valued under the different circumstances listed above

With reference to Q36 of the oral evidence given by the Office for Value for Money to the Treasury Select Committee on 11 December 2024, HC 521, which Departments have not (a) defined and (b) commenced their zero-based reviews.

Phase 2 of the Spending Review launched on the 10th December 2024. At launch, I asked each department to carry out a line-by-line review of existing day-to-day budgets to identify where spending is no longer aligned with this government’s priorities or is poor value for money. Departments are working with HM Treasury on an ongoing basis to define and agree their zero-based reviews. The findings of these reviews will inform Departments’ Spending Review submissions and the allocation of departmental budgets in Phase 2 of the Spending Review, which will conclude later this year.