Written questions by Cross.

With reference to the policy paper entitled Abolition of the furnished holiday lettings tax regime, updated on 7 November 2024, on what evidential basis her Department determined that the furnished holiday let tax regime created market distortions in relation to (a) property investment patterns and (b) tax advantages.

The Government will abolish the Furnished Holiday Lettings (FHL) tax regime from April 2025.The FHL tax regime has created a distortion that favours short-term holiday lets over longer-term rentals, by providing a tax incentive to invest in and provide the former over the latter. Abolishing the regime will remove this incentive by equalising the tax treatment of FHL and non-FHL landlords’ income and gains.

What assessment her Department has made of the potential impact of changes in tax liabilities and reliefs on small-scale furnished holiday let operators transitioning to long-term residential letting; and what the difference in tax relief will be between (a) the current Furnished Holiday Lettings tax regime and (b) the standard residential letting arrangements from April 2025.

The Government will abolish the Furnished Holiday Lettings (FHL) tax regime from April 2025. The FHL tax regime has created a distortion that favours short-term holiday lets over longer-term rentals. Abolishing it will equalise the tax treatment of FHL and non-FHL landlords’ income and gains, making the tax system fairer. Tax reliefs will still be available to individuals providing furnished holiday letting services, including mortgage interest relief at 20 per cent and relief for the replacement of domestic items. These reliefs will be at the same level as those available to landlords who provide long-term residential lets.

What information her Department holds on the total value of tax relief claimed under the furnished holiday let tax regime in (a) Scotland and (b) the UK in the 2023-24 financial year.

HMRC does not hold data on the number of furnished holiday let properties registered for tax purposes. Landlords are not required to register individual properties, or to declare the number of properties that they let. Furnished holiday lettings currently have access to several tax reliefs that non-FHL property businesses do not, such as Business Asset Disposal relief. They also currently receive more generous treatment on finance cost expenses, as they are not subject to the finance cost restriction, and are able to claim capital allowances. However, they also have restrictions on losses which can only be used against profits from the same FHL business and not other property profits, which in some cases will mean they pay more tax as a result of the regime. The most recent estimate on the overall amount of tax relieved as a result of the regime in 2023-24 was calculated at Autumn Budget 2024, and estimated the total tax relief in that year to be £165m, rounded to the nearest £5m. This figure is for the whole of the UK. It is not possible to identify FHL properties located in Scotland separately to the rest of the UK. This estimate was based on tax returns for 2022-23, and takes into account the various impacts of the regime mentioned above.

If she will publish an updated impact assessment of changes to Business Property Relief; and what assessment she has made of the potential impact of those changes on family-owned businesses in (a) Scotland and (b) the United Kingdom.

I refer the Honourable Member to the answers provided in response to her previous questions on this topic: https://questions-statements.parliament.uk/written-questions/detail/2024-11-25/15987/ and https://questions-statements.parliament.uk/written-questions/detail/2024-11-25/15989/. The Chancellor also recently wrote to the Chair of the Treasury Select Committee about the reforms to Agricultural and Business Property Relief, which may be of interest: https://committees.parliament.uk/publications/45691/documents/226235/default/. In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.

What sectoral impact assessments her Department has conducted on changes to Business Property Relief since the Autumn Budget 2024; and whether she has made an estimate of the number of businesses at risk of closure following the introduction of those changes.

I refer the Honourable Member to the answers provided in response to her previous questions on this topic: https://questions-statements.parliament.uk/written-questions/detail/2024-11-25/15987/ and https://questions-statements.parliament.uk/written-questions/detail/2024-11-25/15989/. The Chancellor also recently wrote to the Chair of the Treasury Select Committee about the reforms to Agricultural and Business Property Relief, which may be of interest: https://committees.parliament.uk/publications/45691/documents/226235/default/. In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.

Whether she has had discussions with (a) the Scottish Government and (b) local authorities in Scotland on the abolition of the Furnished Holiday Let tax regime.

The Government will abolish the Furnished Holiday Lettings (FHLs) tax regime from April 2025. This will equalise the tax treatment of FHL and non-FHL landlords’ income and gains.The Government wants to support visitor accommodation alongside housing for longer-term residents to rent or buy. Achieving this balance is crucial in supporting the tourism sector and many of the people that work in the sector, who need access to local housing.Draft legislation to abolish the FHL tax regime was published on 29 July 2024, providing businesses and other parties across the UK - including Scottish stakeholders - an opportunity to share their views on the changes with the Government.

What discussions she has had with (a) VisitScotland, (b) the Scottish Tourism Alliance and (c) other tourism sector representatives on the planned changes to the furnished holiday let tax regime.

The Government will abolish the Furnished Holiday Lettings (FHLs) tax regime from April 2025. This will equalise the tax treatment of FHL and non-FHL landlords’ income and gains.The Government wants to support visitor accommodation alongside housing for longer-term residents to rent or buy. Achieving this balance is crucial in supporting the tourism sector and many of the people that work in the sector, who need access to local housing.Draft legislation to abolish the FHL tax regime was published on 29 July 2024, providing businesses and other parties across the UK - including Scottish stakeholders - an opportunity to share their views on the changes with the Government.

What data her Department holds on the number of furnished holiday let properties registered for tax purposes in (a) Scotland and (b) the UK as of January 2025.

HMRC does not hold data on the number of furnished holiday let properties registered for tax purposes. Landlords are not required to register individual properties, or to declare the number of properties that they let. Furnished holiday lettings currently have access to several tax reliefs that non-FHL property businesses do not, such as Business Asset Disposal relief. They also currently receive more generous treatment on finance cost expenses, as they are not subject to the finance cost restriction, and are able to claim capital allowances. However, they also have restrictions on losses which can only be used against profits from the same FHL business and not other property profits, which in some cases will mean they pay more tax as a result of the regime. The most recent estimate on the overall amount of tax relieved as a result of the regime in 2023-24 was calculated at Autumn Budget 2024, and estimated the total tax relief in that year to be £165m, rounded to the nearest £5m. This figure is for the whole of the UK. It is not possible to identify FHL properties located in Scotland separately to the rest of the UK. This estimate was based on tax returns for 2022-23, and takes into account the various impacts of the regime mentioned above.

What assessment her Department has made of the potential impact of planned changes to the furnished holiday let tax regime on tourism accommodation capacity in (a) rural Scotland and (b) the UK.

The Government will abolish the Furnished Holiday Lettings (FHLs) tax regime from April 2025. This will equalise the tax treatment of FHL and non-FHL landlords’ income and gains.The Government wants to support visitor accommodation alongside housing for longer-term residents to rent or buy. Achieving this balance is crucial in supporting the tourism sector and many of the people that work in the sector, who need access to local housing.Draft legislation to abolish the FHL tax regime was published on 29 July 2024, providing businesses and other parties across the UK - including Scottish stakeholders - an opportunity to share their views on the changes with the Government.

What assessment she has made of the potential impact of changes to the Furnished Holiday Let tax regime on rural tourism businesses.

The Government will abolish the Furnished Holiday Lettings (FHLs) tax regime from April 2025. This will equalise the tax treatment of FHL and non-FHL landlords’ income and gains.The Government wants to support visitor accommodation alongside housing for longer-term residents to rent or buy. Achieving this balance is crucial in supporting the tourism sector and many of the people that work in the sector, who need access to local housing.Draft legislation to abolish the FHL tax regime was published on 29 July 2024, providing businesses and other parties across the UK - including Scottish stakeholders - an opportunity to share their views on the changes with the Government.

What assessment she has made of the potential impact of the new carbon capture clusters on the economy in (a) Teesside and (b) Merseyside.

The first clusters were selected after an assessment of five criteria, including economic benefits. We expect these two clusters to support 4,000 jobs in the short term and 50,000 jobs across the supply chain as the sector matures in the 2030s, Carbon Capture Usage and Storage (CCUS) could add up to £5 billion in Gross Value Added (GVA) to the economy by 2050. The £21.7 billion in funding announced in October 2024 will crowd in private sector investment and unlock a further pipeline of billions of pounds. Industry partners are estimated to have invested £1 billion in already.

Whether she had discussions with industry stakeholders at the International Investment Summit on investment in the UK’s strategic energy infrastructure.

The Chancellor met with a range of domestic and international investors with current and prospective investments in the UK’s strategic energy infrastructure at the International Investment Summit.

Whether an impact assessment has been undertaken of the proposed changes to Agricultural Property Relief on (a) the agricultural rental market and (b) the sale of agricultural land.

The Government published information about the reforms to agricultural property relief and business property relief at www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms. It is expected that up to around 2,000 estates will be affected by the changes to APR and BPR each year, with around half of those being claims that involve AIM shares. Almost three-quarters of estates claiming agricultural property relief (including those claiming agricultural property relief and business property relief together) each year are expected to be unaffected by these reforms. In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.

What assessment she has made of the potential impact of changes to agricultural property relief in the Autumn Budget 2024 on (a) patterns of agricultural land ownership, (b) rural employment, (c) agricultural supply chains and (d) food production.

The Government published information about the reforms to agricultural property relief and business property relief at www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms. It is expected that up to around 2,000 estates will be affected by the changes to APR and BPR each year, with around half of those being claims that involve AIM shares. Almost three-quarters of estates claiming agricultural property relief (including those claiming agricultural property relief and business property relief together) each year are expected to be unaffected by these reforms. In accordance with standard practice, a tax information and impact note will be published alongside the draft legislation before the relevant Finance Bill.

Whether the evidential basis on which her Department's estimate of the total number of farms affected by proposed changes to Agricultural Property Relief and Business Property Relief included agricultural properties for which (a) only Agricultural Property Relief was claimed, (b) Agricultural Property Relief and Business Property Relief were claimed and (c) only Business Property Relief was claimed in the 2021-22 financial year.

Information on APR and BPR reforms can be found in the policy briefing paper published at https://www.gov.uk/government/publications/agricultural-property-relief-and-business-property-relief-reforms/summary-of-reforms-to-agricultural-property-relief-and-business-property-relief#statistical-annex-distribution-of-claims-at-death-for-agricultural-property-relief-and-business-property-relief-in-2021-to-2022. Additionally, more information behind the approach adopted is available in the Chancellor's recent letter to the Chair of the Treasury Select Committee at: https://committees.parliament.uk/publications/45691/documents/226235/default/.

If she will make an assessment of the potential impact of removing VAT from defibrillator sales on (a) public access to defibrillators and (b) survival rates for cardiac arrest patients in areas where fewer than half of postcodes have access to a defibrillator within the recommended response time.​​​​​​​​​​​​​​​​

The Government currently provides VAT reliefs to aid the purchase of defibrillators. For example, when an AED is purchased with funds provided by a charity and then donated to an eligible body no VAT is charged. Furthermore, all state schools in England have been fitted with AEDs. The Government keeps all taxes under review including consideration of impacts. A key consideration for any potential VAT relief is whether savings would be passed on to the consumer, and evidence suggests that savings are not always passed on.VAT is, in addition, the UK's second largest tax forecast to raise £171 billion in 2024/25, and taxation is a vital source of revenue which helps to fund public services, including the NHS. While we keep all taxes under review, the Government has therefore no current plans to make changes to the VAT treatment of AEDs.