Written questions by Smith.

What assessment she has made of the potential merits of the Treasury expanding the FCA’s remit to include in-person banking services.

The Government supports initiatives which give customers access to in-person banking, as well as digital access. The Government is committed to supporting the financial services industry’s roll-out of 350 banking hubs by the end of this Parliament. Over 275 hubs have been announced so far, and more than 230 are already open. The Financial Services and Markets Act 2023 provides the Financial Conduct Authority (FCA) with responsibilities and powers to seek to ensure reasonable provision of cash access services, including free withdrawal and deposit facilities for personal current accounts. Additionally, the FCA’s existing regulatory framework and guidance expect firms to consider the impact of changes to their services on customers, including those who rely on in‑person banking, and to put appropriate alternatives in place, where needed. The Government keeps the effectiveness of current arrangements under review through regular engagement with industry and the FCA to ensure they meet the needs of local communities.

What assessment she has made of the potential impact of voluntary industry commitments to deliver banking hubs on adequate assurance of long term access to in person banking services.

Banking is changing, with many customers benefitting from the convenience and flexibility of managing their finances remotely. However, the Government understands the importance of access to in‑person banking services for communities and high streets and is committed to supporting the financial services industry’s roll-out of 350 banking hubs by the end of this Parliament. Importantly, this number is a floor, not a ceiling, and Cash Access UK will deliver a banking hub wherever LINK has recommended one. Over 275 hubs have been announced so far, and more than 230 are already open. Banking hubs are a voluntary industry initiative from the largest UK high street banks which provide ‘assisted cash services’ in shared premises. They were developed in preparation for the FCA’s access to cash regime. Banking hubs offer everyday counter services provided by Post Office staff, allowing people and businesses to withdraw and deposit cash, pay bills and make balance enquiries. They also contain dedicated rooms where customers can see community bankers from their own bank to carry out wider banking services. Banking hub locations are independently recommended by LINK, the operator of UK’s largest ATM network. When a bank branch closes, or there is a material change to a cash service, or a community request is received, LINK conducts an access to cash assessment under the access to cash regime set out in the Financial Services and Markets Act 2023. In its assessments, LINK takes into consideration a wide range of criteria, including those unique to each location, such as population demographics, public transport links, existing and remaining cash access facilities and the number of shops. Customers can also access everyday banking services through the Post Office. The Post Office Banking Framework allows personal and business customers to withdraw and deposit cash, check balances and pay bills at over 10,500 Post Office branches across the UK. Some banks also provide points of access through initiatives such as pop-up services in libraries and community centres, or mobile banking vans serving rural and remote areas.  The Government supports initiatives which give customers access to in-person banking, as well as digital access.The Government keeps the effectiveness of current arrangements under review through regular engagement with stakeholders to ensure they meet the needs of local communities.

What progress her Department has made in amending the rules on Gift Aid.

The government is pleased to confirm that charities will continue to be eligible for Gift Aid following implementation of the Digital Markets, Competition and Consumers Act 2024. HMRC has published guidance setting out that where subscriptions are currently eligible under existing Gift Aid rules, they will remain so. The guidance can be found on gov.uk via: Chapter 3 - 3.13.4: Gift Aid - GOV.UK

What assessment she has made of Link’s possible responsibility for delivering access to banking services and access to cash services.

Banking is changing, with many customers benefiting from the convenience and flexibility of managing their finances remotely. However, the Government understands the importance of face-to-face banking services to communities and is committed to supporting sufficient access for customers across the country. The Financial Conduct Authority (FCA) assumed regulatory responsibility for access to cash in September 2024. Where a resident, community organisation or other interested party feels access to cash in their community is insufficient, they can submit a request for a cash access assessment. LINK, the independent industry coordinating body responsible for conducting access to cash assessments, will then assess a community’s access to cash needs, and will recommend appropriate solutions, including banking hubs, where it considers a community requires additional cash services. LINK’s assessment criteria are based on rules set by the FCA. The FCA’s rules require LINK to consider a range of factors in their assessments. This includes travel times to nearby cash facilities and local population demographics, including the levels of vulnerability and the number of elderly people within the community. Any decisions on changes to LINK’s independent assessment criteria are a matter for LINK, the financial services sector, and for the FCA, which oversees the access to cash regime. Neither the FCA or LINK have responsibility for access to banking or in-person services. To support communities across the UK, the financial services industry is committed to rolling out 350 banking hubs across the UK by the end of this Parliament. Over 270 hubs have been announced so far, and more than 210 are already open.Banking hubs provide access to everyday counter services through Post Office staff, including cash withdrawals and deposits, balance enquiries and bill payments. They also contain dedicated rooms where customers can see community bankers from their own bank to carry out other banking services.

What assessment she has made of the potential merits of (a) allowing the payment of and (b) refunding Vehicle Excise Duty on a (i) daily and (ii) weekly basis.

Since 1 October 2014, customers have had the option to pay VED monthly or in two instalments per year via direct debit, with a 5% surcharge. This scheme enables the spreading of VED payments at a lower surcharge rate than non-direct debit instalments, and helps individuals and families to plan and manage their finances. When considering changes to tax administration, the Government must balance a range of competing objectives such as complexity in the tax system, administrative burdens and cost. 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. The Chancellor makes decisions on tax policy at fiscal events in the context of the public finances.

Whether she plans to differentiate between small family businesses and major corporations for overall tax liabilities.

The Government provides support through the tax system to small businesses in a range of ways.The Small Profits Rate and taper rate mean almost 70% of actively trading companies are taxed at a rate of 19%, with only 10% of businesses paying the full 25%.Within National Insurance, the Government has protected the smallest businesses by increasing the Employment Allowance from £5,000 to £10,500, which means that 865,000 employers will pay no employer NICs at all this year.The Government also increased the Small Employer Compensation rate, which compensates small employers for the additional costs of paying National Insurance when employees receive statutory payments (e.g. Statutory Maternity Pay).At £90,000, the UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD. This keeps the majority of businesses out of the VAT regime altogetherSmall Business Rate Relief (SBRR) is available to businesses with a single property below a set rateable value. Eligible properties under £12,000 will receive 100 per cent relief, which means over a third of businesses in England (more than 700,000) pay no business rates at all. There is also tapered support available to properties valued between £12,000 and £15,000, which an additional c.60,000 businesses benefit from.

What steps her Department is taking to prevent North Korean cyber criminals laundering stolen funds through UK institutions.

The Government is aware of reporting relating to the recent cyber activity linked to the DPRK, involving the cryptocurrency exchange ByBit. The UK works closely with our allies to deter all malign actors from conducting malicious cyber activity. This includes through targeted sanctions, public attributions and working closely with partners to encourage capacity building and cyber deterrence. Under the Money Laundering Regulations, it is mandatory for banks and other financial institutions to apply enhanced due diligence to all transactions linked to North Korea to ensure they do not involve the proceeds of crime. In addition, the UK’s DPRK sanctions regime imposes broad restrictions of a financial nature, including prohibitions on UK financial institutions establishing or maintaining financial relationships with DPRK financial institutions. The Office of Financial Sanctions Implementation works to support UK businesses, including financial institutions, to comply with sanctions on the DPRK. This includes publication of advisory notices such as the Advisory on North Korean IT Workers published in September 2024. Cryptoassets, specifically cryptoasset exchange providers and custodian wallet providers, have been regulated under the Money Laundering Regulations since January 2020. UK cryptoasset firms must register with the Financial Conduct Authority which acts as a supervisory body to ensure firms have appropriate systems in place to prevent money laundering. The money laundering risk these cryptoasset firms are exposed to will be assessed in the updated National Risk Assessment of Money Laundering and Terrorist Financing, due to be published later this year.

What assessment her Department has made of the vulnerabilities of cryptocurrency to North Korean criminals.

The Government is aware of reporting relating to the recent cyber activity linked to the DPRK, involving the cryptocurrency exchange ByBit. The UK works closely with our allies to deter all malign actors from conducting malicious cyber activity. This includes through targeted sanctions, public attributions and working closely with partners to encourage capacity building and cyber deterrence. Under the Money Laundering Regulations, it is mandatory for banks and other financial institutions to apply enhanced due diligence to all transactions linked to North Korea to ensure they do not involve the proceeds of crime. In addition, the UK’s DPRK sanctions regime imposes broad restrictions of a financial nature, including prohibitions on UK financial institutions establishing or maintaining financial relationships with DPRK financial institutions. The Office of Financial Sanctions Implementation works to support UK businesses, including financial institutions, to comply with sanctions on the DPRK. This includes publication of advisory notices such as the Advisory on North Korean IT Workers published in September 2024. Cryptoassets, specifically cryptoasset exchange providers and custodian wallet providers, have been regulated under the Money Laundering Regulations since January 2020. UK cryptoasset firms must register with the Financial Conduct Authority which acts as a supervisory body to ensure firms have appropriate systems in place to prevent money laundering. The money laundering risk these cryptoasset firms are exposed to will be assessed in the updated National Risk Assessment of Money Laundering and Terrorist Financing, due to be published later this year.

If she will have discussions with her US counterpart on the impact of the US Foreign Account Tax Compliance Act on the privacy rights of UK citizens who have US citizenship but have never resided in that country.

US law subjects all US citizens to US taxation, regardless of where they reside. This can include US citizens who were born in the US but who may have left at a young age and have few remaining ties with the country. US tax policy is a matter for the US, and it is not within the power of the UK government to change this. In 2010, the US introduced the US Foreign Account Tax Compliance Act (FATCA) to combat tax evasion by US tax residents using foreign accounts. FATCA does not create new tax liabilities nor change the basis of US taxation; it is rather a reporting mechanism. In September 2012, the UK Government signed an Intergovernmental Agreement (IGA) with the US to implement FATCA in the UK. As such, HMRC requires UK financial institutions to report information to HMRC on account holders who are US resident or US citizens and exchanges this information with the IRS annually. In return HMRC receives information about UK tax residents’ accounts in the US. All of the information exchanged is covered by the secrecy provisions of the UK/US Double Taxation Convention.

If she will take steps to simplify the (a) commodity code system, (b) requirements to weigh items and (c) other administrative requirements for businesses operating cross-border trade.

The UK's commodity code nomenclature forms the core structure for delivering the UK's international trade policy. Derived from the World Custom’s Organization’s Harmonized System, for which HMRC represents and promotes UK interests, the commodity codes used in the UK provide critical granularity to enable the delivery of key UK policy required to support UK growth. As such, there are no plans to fundamentally change or reduce the UK commodity code structure; the current system is designed to both facilitate cross border trade and help maintain the UK’s compliance programme to protect UK businesses. HMRC offers guidance and a significant support service to help people in determining the correct commodity code for their goods.The weighing of goods for customs duty and declarations is required to operate an effective tariff system and is in line with recognised international trade practices. We are therefore unlikely to make any significant changes to weight requirements for the types of goods covered.The government is committed to facilitating legitimate UK trade and HMRC has set out a package of measures to simplify customs import and export processes for traders, while upholding the UK’s high regulatory and security standards at the border. Details of this can be found at https://www.gov.uk/government/publications/customs-simplification-measures-december-2023/summary-of-customs-simplification-measures-december-2023.Whilst working within a global customs framework, HMRC’s strategic aim of ‘making it easy to get tax right and hard to bend or break the rules’ ensures that HMRC has an ongoing interest in balancing the need for facilitations, to reduce administrative burdens, and the right compliance activities to support and protect UK businesses.

If she will take steps to reduce the administrative requirements for businesses spending less than £10,000 on a single trip in Europe.

Passengers bringing in accompanied commercial goods into Great Britain can benefit from Merchandise in Baggage arrangements such as making a simple online declaration, rather than a full electronic customs declaration, and not being required to make a Safety and Security declaration. This applies where the goods are under £2,500, weigh less than 1,000kg and are not restricted or excise goods. The government is committed to facilitating legitimate UK trade and HMRC has set out a package of measures to simplify customs import and export processes for traders, while upholding the UK’s high regulatory and security standards at the border. Details of this can be found at https://www.gov.uk/government/publications/customs-simplification-measures-december-2023/summary-of-customs-simplification-measures-december-2023.

Whether she plans to reduce import duties on businesses spending less than £10,000 on goods in Europe on a single trip.

The UK-EU Trade and Cooperation Agreement governs goods trade between the UK and EU and provides that all goods can be traded tariff-free subject to rules of origin requirements being met. The Government is committed to working with European partners to improve the UK’s trade and investment relationship across a range of areas. Further information on trading tariff-free under the EU-UK Trade and Cooperation Agreement is available on GOV.UK here: Introduction to rules of origin and claiming duties when trading between the UK and EU - GOV.UK