Written questions by Glindon.

What proportion of frontline customer contact work HMRC expects to be delivered by Managed Staff Provider staff versus directly employed civil servants over (a) the next 12 months and (b) the duration of the Comprehensive Spending Review, and if she will make a statement.

Customer demand for HMRC services can fluctuate significantly, both seasonally and in response to external events. HMRC uses Managed Service Providers (MSPs) to provide additional, flexible capacity to help manage these types of variations and support performance on customer helplines. Incorporating MSPs into the overall resourcing mix helps HMRC maintain customer service standards, while retaining expertise within its workforce. The current staff provided by MSPs represent additional capacity for 2025/26. The proportion of frontline customer contact work delivered by MSP staff is small compared to the proportion of work handled by HMRC staff. No HMRC staff will be made redundant as a result of this initiative. HMRC headcount is forecast to increase by the end of the Spending Review 2025 period. HMRC are not privatising their services and there are no plans to outsource customer contact services beyond this limited contract for additional capacity in 2025/26. HMRC intends the expertise behind customer support to remain within HMRC. HMRC will continue to use a range of resourcing models, including Surge, alongside the use of MSPs, to meet variable customer demand. With a complex mix of transformation, resourcing models and impacts from external events it is difficult to attribute work to single things or make statements about permanent approaches. Future workforce decisions will be taken through normal business planning and Spending Review processes. HMRC are currently in an initial approximately 18 month ‘proof of value’ phase using existing Government contracts. Whilst HMRC sees MSPs as part of its resourcing mix going forward, a joint HMRC and PCS evaluation will take place to inform future use, beyond the next 12 months.

What modelling has been undertaken on the future role of Surge staff and other flexible HMRC resources in light of potential Managed Service Provider expansion.

Customer demand for HMRC services can fluctuate significantly, both seasonally and in response to external events. HMRC uses Managed Service Providers (MSPs) to provide additional, flexible capacity to help manage these types of variations and support performance on customer helplines. Incorporating MSPs into the overall resourcing mix helps HMRC maintain customer service standards, while retaining expertise within its workforce. The current staff provided by MSPs represent additional capacity for 2025/26. The proportion of frontline customer contact work delivered by MSP staff is small compared to the proportion of work handled by HMRC staff. No HMRC staff will be made redundant as a result of this initiative. HMRC headcount is forecast to increase by the end of the Spending Review 2025 period. HMRC are not privatising their services and there are no plans to outsource customer contact services beyond this limited contract for additional capacity in 2025/26. HMRC intends the expertise behind customer support to remain within HMRC. HMRC will continue to use a range of resourcing models, including Surge, alongside the use of MSPs, to meet variable customer demand. With a complex mix of transformation, resourcing models and impacts from external events it is difficult to attribute work to single things or make statements about permanent approaches. Future workforce decisions will be taken through normal business planning and Spending Review processes. HMRC are currently in an initial approximately 18 month ‘proof of value’ phase using existing Government contracts. Whilst HMRC sees MSPs as part of its resourcing mix going forward, a joint HMRC and PCS evaluation will take place to inform future use, beyond the next 12 months.

Whether HMRC intends for the Managed Service Provider to remain limited to peak demand cover or to become a permanent component of Customer Services Group resourcing, and if she will make a statement.

Customer demand for HMRC services can fluctuate significantly, both seasonally and in response to external events. HMRC uses Managed Service Providers (MSPs) to provide additional, flexible capacity to help manage these types of variations and support performance on customer helplines. Incorporating MSPs into the overall resourcing mix helps HMRC maintain customer service standards, while retaining expertise within its workforce. The current staff provided by MSPs represent additional capacity for 2025/26. The proportion of frontline customer contact work delivered by MSP staff is small compared to the proportion of work handled by HMRC staff. No HMRC staff will be made redundant as a result of this initiative. HMRC headcount is forecast to increase by the end of the Spending Review 2025 period. HMRC are not privatising their services and there are no plans to outsource customer contact services beyond this limited contract for additional capacity in 2025/26. HMRC intends the expertise behind customer support to remain within HMRC. HMRC will continue to use a range of resourcing models, including Surge, alongside the use of MSPs, to meet variable customer demand. With a complex mix of transformation, resourcing models and impacts from external events it is difficult to attribute work to single things or make statements about permanent approaches. Future workforce decisions will be taken through normal business planning and Spending Review processes. HMRC are currently in an initial approximately 18 month ‘proof of value’ phase using existing Government contracts. Whilst HMRC sees MSPs as part of its resourcing mix going forward, a joint HMRC and PCS evaluation will take place to inform future use, beyond the next 12 months.

Whether HMRC anticipates a reduction in the use or recruitment of Surge staff as MSP staffing increases.

Customer demand for HMRC services can fluctuate significantly, both seasonally and in response to external events. HMRC uses Managed Service Providers (MSPs) to provide additional, flexible capacity to help manage these types of variations and support performance on customer helplines. Incorporating MSPs into the overall resourcing mix helps HMRC maintain customer service standards, while retaining expertise within its workforce. The current staff provided by MSPs represent additional capacity for 2025/26. The proportion of frontline customer contact work delivered by MSP staff is small compared to the proportion of work handled by HMRC staff. No HMRC staff will be made redundant as a result of this initiative. HMRC headcount is forecast to increase by the end of the Spending Review 2025 period. HMRC are not privatising their services and there are no plans to outsource customer contact services beyond this limited contract for additional capacity in 2025/26. HMRC intends the expertise behind customer support to remain within HMRC. HMRC will continue to use a range of resourcing models, including Surge, alongside the use of MSPs, to meet variable customer demand. With a complex mix of transformation, resourcing models and impacts from external events it is difficult to attribute work to single things or make statements about permanent approaches. Future workforce decisions will be taken through normal business planning and Spending Review processes. HMRC are currently in an initial approximately 18 month ‘proof of value’ phase using existing Government contracts. Whilst HMRC sees MSPs as part of its resourcing mix going forward, a joint HMRC and PCS evaluation will take place to inform future use, beyond the next 12 months.

Whether HMRC can confirm that Managed Staffing Provider staffing represents additional capacity rather than a substitution for civil service roles.

Customer demand for HMRC services can fluctuate significantly, both seasonally and in response to external events. HMRC uses Managed Service Providers (MSPs) to provide additional, flexible capacity to help manage these types of variations and support performance on customer helplines. Incorporating MSPs into the overall resourcing mix helps HMRC maintain customer service standards, while retaining expertise within its workforce. The current staff provided by MSPs represent additional capacity for 2025/26. The proportion of frontline customer contact work delivered by MSP staff is small compared to the proportion of work handled by HMRC staff. No HMRC staff will be made redundant as a result of this initiative. HMRC headcount is forecast to increase by the end of the Spending Review 2025 period. HMRC are not privatising their services and there are no plans to outsource customer contact services beyond this limited contract for additional capacity in 2025/26. HMRC intends the expertise behind customer support to remain within HMRC. HMRC will continue to use a range of resourcing models, including Surge, alongside the use of MSPs, to meet variable customer demand. With a complex mix of transformation, resourcing models and impacts from external events it is difficult to attribute work to single things or make statements about permanent approaches. Future workforce decisions will be taken through normal business planning and Spending Review processes. HMRC are currently in an initial approximately 18 month ‘proof of value’ phase using existing Government contracts. Whilst HMRC sees MSPs as part of its resourcing mix going forward, a joint HMRC and PCS evaluation will take place to inform future use, beyond the next 12 months.

What assessment she has made of the potential cumulative impact of (a) the proposed business rates revaluation in April 2026, (b) the removal of the 40 per cent relief for the retail, hospitality and leisure sector and (c) changes to the business rates calculation formula on small businesses during 2026 to 2029.

At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since the pandemic, which has led to significant increases in rateable values for some properties as they recover from the pandemic.To respond to those who are seeing large increases, the Government has already acted to limit increases in bills, announcing a support package worth £4.3 billion package at the Budget.The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties.The Government is also supporting businesses to grow. At Budget, the Government announced the extension of Small Business Rates Relief (SBRR) so that businesses opening second premises can retain their SBRR for three years, tripling the current allowance. The Call for Evidence, published at Budget, focused on how reform of the business rates system can be used to incentivise and secure more investment by Britain’s businesses.

What assessment she has made of the potential impact of the proposed changes to business rates on the level of employment in small hospitality, retail and leisure businesses.

At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since the pandemic, which has led to significant increases in rateable values for some properties as they recover from the pandemic.To respond to those who are seeing large increases, the Government has already acted to limit increases in bills, announcing a support package worth £4.3 billion package at the Budget.The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties.The Government is also supporting businesses to grow. At Budget, the Government announced the extension of Small Business Rates Relief (SBRR) so that businesses opening second premises can retain their SBRR for three years, tripling the current allowance. The Call for Evidence, published at Budget, focused on how reform of the business rates system can be used to incentivise and secure more investment by Britain’s businesses.

What discussions she has had with the Secretary of State for Business and Trade on the potential impact of business rates changes on the ability of small businesses to grow and invest.

At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since the pandemic, which has led to significant increases in rateable values for some properties as they recover from the pandemic.To respond to those who are seeing large increases, the Government has already acted to limit increases in bills, announcing a support package worth £4.3 billion package at the Budget.The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties.The Government is also supporting businesses to grow. At Budget, the Government announced the extension of Small Business Rates Relief (SBRR) so that businesses opening second premises can retain their SBRR for three years, tripling the current allowance. The Call for Evidence, published at Budget, focused on how reform of the business rates system can be used to incentivise and secure more investment by Britain’s businesses.

What assessment she has made of the adequacy of the ability of small businesses such as bakeries, cafés and hairdressers to manage changes in business rates alongside other cost pressures.

At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since the pandemic, which has led to significant increases in rateable values for some properties as they recover from the pandemic.To respond to those who are seeing large increases, the Government has already acted to limit increases in bills, announcing a support package worth £4.3 billion package at the Budget.The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties.The Government is also supporting businesses to grow. At Budget, the Government announced the extension of Small Business Rates Relief (SBRR) so that businesses opening second premises can retain their SBRR for three years, tripling the current allowance. The Call for Evidence, published at Budget, focused on how reform of the business rates system can be used to incentivise and secure more investment by Britain’s businesses.

What assessment she has made of the potential impact of changes to business rates from April 2026 on small businesses outside the pub sector.

At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since the pandemic, which has led to significant increases in rateable values for some properties as they recover from the pandemic.To respond to those who are seeing large increases, the Government has already acted to limit increases in bills, announcing a support package worth £4.3 billion package at the Budget.The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties.The Government is also supporting businesses to grow. At Budget, the Government announced the extension of Small Business Rates Relief (SBRR) so that businesses opening second premises can retain their SBRR for three years, tripling the current allowance. The Call for Evidence, published at Budget, focused on how reform of the business rates system can be used to incentivise and secure more investment by Britain’s businesses.

What steps she is taking to ensure that business rates policy supports the long-term viability of high streets.

The amount of business rates paid on each property is based on the rateable value of the property, assessed by the Valuation Office Agency (VOA), and the multiplier values, which are set by the Government. Rateable values are re-assessed every three years. Revaluations ensure that the rateable values of properties (i.e. the tax base) remain in line with market changes, and that the tax rates adjust to reflect changes in the tax base. At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since Covid, which has led to significant increases in rateable values for some properties. To support with bill increases, at the Budget, the Government introduced a support package worth £4.3 billion over the next three years, including to protect ratepayers seeing their bills increase because of the revaluation. As a result, over half of ratepayers will see no bill increases, including 23% seeing their bills go down. Government support also means that most properties seeing increases will see them capped at 15% or less next year, or £800 for the smallest. The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties. More broadly, later this year, the Government will bring forward a new High Streets Strategy to reinvigorate our communities. The Government will work with businesses and representative bodies to pull this Strategy together.

What assessment she has made with Cabinet colleagues of the alignment between business rates policy and the Government’s objectives for high street regeneration.

The amount of business rates paid on each property is based on the rateable value of the property, assessed by the Valuation Office Agency (VOA), and the multiplier values, which are set by the Government. Rateable values are re-assessed every three years. Revaluations ensure that the rateable values of properties (i.e. the tax base) remain in line with market changes, and that the tax rates adjust to reflect changes in the tax base. At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since Covid, which has led to significant increases in rateable values for some properties. To support with bill increases, at the Budget, the Government introduced a support package worth £4.3 billion over the next three years, including to protect ratepayers seeing their bills increase because of the revaluation. As a result, over half of ratepayers will see no bill increases, including 23% seeing their bills go down. Government support also means that most properties seeing increases will see them capped at 15% or less next year, or £800 for the smallest. The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties. More broadly, later this year, the Government will bring forward a new High Streets Strategy to reinvigorate our communities. The Government will work with businesses and representative bodies to pull this Strategy together.

Whether her Department has considered the potential merits of applying full business rates relief already provided for within the business rates system across eligible sectors.

The amount of business rates paid on each property is based on the rateable value of the property, assessed by the Valuation Office Agency (VOA), and the multiplier values, which are set by the Government. Rateable values are re-assessed every three years. Revaluations ensure that the rateable values of properties (i.e. the tax base) remain in line with market changes, and that the tax rates adjust to reflect changes in the tax base. At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since Covid, which has led to significant increases in rateable values for some properties. To support with bill increases, at the Budget, the Government introduced a support package worth £4.3 billion over the next three years, including to protect ratepayers seeing their bills increase because of the revaluation. As a result, over half of ratepayers will see no bill increases, including 23% seeing their bills go down. Government support also means that most properties seeing increases will see them capped at 15% or less next year, or £800 for the smallest. The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties. More broadly, later this year, the Government will bring forward a new High Streets Strategy to reinvigorate our communities. The Government will work with businesses and representative bodies to pull this Strategy together.

What assessment her Department has made of the potential impact of business rates changes on the ability of small businesses to expand, invest and recruit staff.

At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since the pandemic, which has led to significant increases in rateable values for some properties as they recover from the pandemic.To respond to those who are seeing large increases, the Government has already acted to limit increases in bills, announcing a support package worth £4.3 billion package at the Budget.The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties.The Government is also supporting businesses to grow. At Budget, the Government announced the extension of Small Business Rates Relief (SBRR) so that businesses opening second premises can retain their SBRR for three years, tripling the current allowance. The Call for Evidence, published at Budget, focused on how reform of the business rates system can be used to incentivise and secure more investment by Britain’s businesses.

What modelling her Department has undertaken on the potential impact of proposed business rates changes on the level of small business closures and employment levels.

At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since the pandemic, which has led to significant increases in rateable values for some properties as they recover from the pandemic.To respond to those who are seeing large increases, the Government has already acted to limit increases in bills, announcing a support package worth £4.3 billion package at the Budget.The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties.The Government is also supporting businesses to grow. At Budget, the Government announced the extension of Small Business Rates Relief (SBRR) so that businesses opening second premises can retain their SBRR for three years, tripling the current allowance. The Call for Evidence, published at Budget, focused on how reform of the business rates system can be used to incentivise and secure more investment by Britain’s businesses.

What estimate she has made of the average percentage change in business rates liabilities for small businesses such as bakeries, cafés, hotels and dry cleaners between 2026 and 2029.

The amount of business rates paid on each property is based on the rateable value of the property, assessed by the Valuation Office Agency (VOA), and the multiplier values, which are set by the Government. Rateable values are re-assessed every three years. Revaluations ensure that the rateable values of properties (i.e. the tax base) remain in line with market changes, and that the tax rates adjust to reflect changes in the tax base. At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since Covid, which has led to significant increases in rateable values for some properties. To support with bill increases, at the Budget, the Government introduced a support package worth £4.3 billion over the next three years, including to protect ratepayers seeing their bills increase because of the revaluation. As a result, over half of ratepayers will see no bill increases, including 23% seeing their bills go down. Government support also means that most properties seeing increases will see them capped at 15% or less next year, or £800 for the smallest. The Government is also introducing new permanently lower tax rates for eligible retail, hospitality and leisure (RHL) properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties. More broadly, later this year, the Government will bring forward a new High Streets Strategy to reinvigorate our communities. The Government will work with businesses and representative bodies to pull this Strategy together.

Whether she has assessed the potential merits of applying the proposed 15% business rates relief for pubs to the hospitality, retail and leisure sectors.

Other RHL properties will continue to benefit from the wider £4.3 billion support package announced at Budget. This support package means most properties seeing increases will see them capped at 15% or less next year, or £800 for the smallest. The Government is also introducing new permanently lower tax rates for eligible RHL properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties. More broadly, later this year, the Government will bring forward a new High Streets Strategy to reinvigorate our communities. The Government will work with businesses and representative bodies to pull this Strategy together.

What assessment she has the made of the potential impact of limiting extended business rates support to pubs on other hospitality, retail and leisure businesses.

Other RHL properties will continue to benefit from the wider £4.3 billion support package announced at Budget. This support package means most properties seeing increases will see them capped at 15% or less next year, or £800 for the smallest. The Government is also introducing new permanently lower tax rates for eligible RHL properties. These new tax rates are worth nearly £1 billion per year and will benefit over 750,000 properties. More broadly, later this year, the Government will bring forward a new High Streets Strategy to reinvigorate our communities. The Government will work with businesses and representative bodies to pull this Strategy together.

Whether her Department has assessed the potential merits of amending the business rates framework to allow licensed betting offices to qualify for Retail, Hospitality and Leisure relief on the same basis as other gambling leisure premises.

In October 2024, the Government laid a statutory instrument defining the retail, hospitality and leisure (RHL) properties that will be eligible for new, lower business rates multipliers from April 2026. Since they were announced at Budget 2024, the Government has been clear that scope of the RHL multipliers would broadly reflect the scope of the current RHL relief. The previous Government made the decision to exclude betting shops from the relief. This Government considered the issue in the round, and decided to continue the treatment the previous Government chose to ensure the tax cut is appropriately targeted. The classification of betting shops as financial and professional services is a planning use class and is not assigned by the Valuation Office Agency (VOA) for business rates purposes. The VOA values land and buildings based on physical features and how the property is occupied. Planning use classes do not affect how the VOA value betting shops.

With reference to her Department's guidance entitled Budget 2025: Retail, Hospitality and Leisure Factsheet, published on 28 November 2025, for what reason licensed betting offices are classified as financial services for business rates purposes.

In October 2024, the Government laid a statutory instrument defining the retail, hospitality and leisure (RHL) properties that will be eligible for new, lower business rates multipliers from April 2026. Since they were announced at Budget 2024, the Government has been clear that scope of the RHL multipliers would broadly reflect the scope of the current RHL relief. The previous Government made the decision to exclude betting shops from the relief. This Government considered the issue in the round, and decided to continue the treatment the previous Government chose to ensure the tax cut is appropriately targeted. The classification of betting shops as financial and professional services is a planning use class and is not assigned by the Valuation Office Agency (VOA) for business rates purposes. The VOA values land and buildings based on physical features and how the property is occupied. Planning use classes do not affect how the VOA value betting shops.