Written questions by Wilkinson.

What assessment her department has made of the potential impact of the Valuation Office Agency's reclassification of flexible office spaces as single properties on (a) the level of business rates and (b) small and medium-sized enterprises.

The Valuation Office Agency (VOA) is responsible for valuing non-domestic property for business rates purposes. They are required to maintain accurate rating lists in England impartially and independently of central Government, and must consider developments in relevant caselaw.As a result of case law developments, the VOA have concluded that, rather than each room within a serviced office being assessed separately, most serviced offices will need to be assessed as a single property, unless clear evidence demonstrates a need to have separate assessments. Each serviced office is looked at on a case-by-case basis, and the VOA are addressing properties where they have received legal advice, or where unit of assessment issues are brought to its attention. Reviewing a small number of cases will help clarify the application of legislation on serviced offices. At this time, there is no sector-wide review of serviced office assessments underway. The VOA will continue to monitor legal developments and update its approach as needed.A single rating assessment would mean occupying businesses will face no business rates bill at all. Instead, the serviced office provider will be liable for business rates on the entire assessment. It is for serviced office providers to decide if they will pass the cost on to their tenants, depending on contractual agreements.

What steps her department plans to take to support small and medium-sized enterprises who no longer qualify for business rates relief due to the VOAs reclassification of flexible office spaces as single properties.

The Valuation Office Agency (VOA) is responsible for valuing non-domestic property for business rates purposes. They are required to maintain accurate rating lists in England impartially and independently of central Government, and must consider developments in relevant caselaw.As a result of case law developments, the VOA have concluded that, rather than each room within a serviced office being assessed separately, most serviced offices will need to be assessed as a single property, unless clear evidence demonstrates a need to have separate assessments. Each serviced office is looked at on a case-by-case basis, and the VOA are addressing properties where they have received legal advice, or where unit of assessment issues are brought to its attention. Reviewing a small number of cases will help clarify the application of legislation on serviced offices. At this time, there is no sector-wide review of serviced office assessments underway. The VOA will continue to monitor legal developments and update its approach as needed.A single rating assessment would mean occupying businesses will face no business rates bill at all. Instead, the serviced office provider will be liable for business rates on the entire assessment. It is for serviced office providers to decide if they will pass the cost on to their tenants, depending on contractual agreements.

What assessment her Department has made of the potential impact of student loan repayment thresholds, tax thresholds and fiscal drag on incentives to work for people with plan 2 student loans.

The Government is making fair and necessary choices on tax so it can deliver on the public’s priorities. Everyone is being asked to contribute to support these goals, but the Government is keeping the contribution as low as possible by pursuing a programme of reform to fix longstanding issues in the tax system – modernising it, and addressing unequal and unfair treatment, while ensuring the wealthiest contribute more.

What steps her department is taking to change (i) the tax system and (ii) public sector funds to encourage further investment in start-ups and early stage companies.

The Government is committed to making the UK the best place to start and grow a business, recognising the importance of a competitive investment environment for economic growth. The UK is already the best place in Europe to start a business, and Autumn Budget 2025 sets out measures which will unlock even more investment in UK entrepreneurs and innovators, including start-ups and early stage companies. On tax, we are doubling the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) investment limits, and expanding eligibility for the Enterprise Management Incentive (EMI) scheme. These changes will encourage further investment in our most successful companies, and attract top talent to help companies grow. On public finance, UK Research and Innovation (UKRI) will direct £7 billion to support innovative company growth, and, as a first step, Innovate UK will launch a £130 million Growth Catalyst programme to accelerate frontier firms. The British Business Bank (BBB) will increase annual deployment by two-thirds, aiming to unlock £26 billion of private capital alongside £13 billion in public funding, and enable up to £10 billion in small business lending through guarantees. Together, these steps will strengthen the UK’s start-up and scale-up ecosystem, giving founders the confidence and capital to start here, scale here, and succeed here.

What assessment he has made of the adequacy of the UK’s approach to VAT on hospitality compared with EU member states.

The Government recognises the significant contribution made by hospitality businesses to economic growth and social life in the UK. VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. The UK’s VAT rate of 20 per cent is close to the OECD average of 19.3 per cent. The UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD, at £90,000. This keeps the majority of businesses out of the VAT regime altogether. HMRC estimate that the cost of a 5 per cent reduced rate for accommodation, hospitality and tourist attractions would be around £13 billion this financial year. If the scope were also to include alcoholic beverages, the cost would be approximately £3 billion greater.

If she will make an assessment of the potential impact of lowering VAT on construction projects on town centre regeneration.

The Government supports town centre preservation and regeneration. In September, the Government launched an overarching Pride in Place programme, providing up to £5bn over 10 years to support almost 250 places. It will target investment to communities that need it most, addressing the visible decline on high streets and the wider public realm. Local areas will be able to invest in things like youth clubs, libraries, community grocers, cultural venues, and health and wellbeing services. VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. Exceptions to the standard rate have always been limited and balanced against affordability considerations.

Whether the Financial Conduct Authority plans to (a) investigate and (b) report on whether all firms’ (i) flood and (ii) storm definitions comply with the Consumer Duty.

This is a matter for the Financial Conduct Authority (FCA) which is operationally independent from government. The FCA will respond to the Member by letter, and a copy of this letter will be placed in the Library of the House of Commons.

What steps her Department is taking to help prevent VAT fraud by (a) misrepresentation and (b) impersonation.

Tax fraud undermines our economy, hurts legitimate businesses and robs our vital public services of much-needed funds. The Government is committed to tackling tax non-compliance through technology, operational interventions and policy change.HMRC deploys advanced analytics and risk profiling to identify businesses that misrepresent their activities, turnover, or goods classification to gain VAT advantages, which are subject to targeted compliance interventions. The number of HMRC compliance officers will grow by an additional 5,500 by 2029/30 from July 2024 levels.HMRC combines identity verification and registration checks using a range of risk indicators to prevent and detect impersonation. HMRC also uses a wide range of civil and criminal powers to tackle the criminal groups behind VAT fraud. The Government is investing to ensure HMRC can continue to improve resilience of its systems and improve the way customers engage securely with HMRC.

Whether she has considered reviewing banding for vehicle excise duty based on emissions rather than registration date.

Different Vehicle Excise Duty (VED) rates apply to cars, vans, motorcycles and HGVs and the rate for each vehicle is calculated according to a range of factors, such as its date of first registration, weight, or CO2 emissions. Since 2001, the VED system has encouraged the uptake of cars with low carbon dioxide (CO2) emissions to help meet the UK's legally binding climate targets. Cars first registered between 1 March 2001 and 31 March 2017 pay VED annually according to CO2 emissions. From 1 April 2017, new cars pay a variable first year rate according to the emissions of the vehicle, with the most polluting currently paying over £5,400, and zero emission models currently pay £10. After the first year, most cars move to a standard annual rate, currently set at £195.

How many video games studios have received (a) Video Games Tax Relief and (b) Video Games Expenditure Credit since they were introduced.

The Government recognises the importance of the creative industries, including the key role they play in driving economic growth. Video games jobs are highly productive at nearly double the average national output, and technology developed by games businesses contributes an estimated £1.3 billion output to the UK economy each year. Video games companies benefit from the Video Games Expenditure Credit (VGEC), which was introduced on 1 January 2024 and provides a tax credit of 34 per cent on UK video games development costs. All new games must claim VGEC from 1 April 2025 and VGTR will expire in April 2027. HMRC publish annual creative industry tax relief statistics on gov.uk, that can be found here: https://www.gov.uk/government/collections/creative-industries-statistics

What assessment she has made of potential impact of the Video Games Expenditure Credit on levels of (a) employment, (b) investment, (c) studio formation and (d) IP development.

The Government recognises the importance of the creative industries, including the key role they play in driving economic growth. Video games jobs are highly productive at nearly double the average national output, and technology developed by games businesses contributes an estimated £1.3 billion output to the UK economy each year. Video games companies benefit from the Video Games Expenditure Credit, which provides a tax credit of 34 per cent on UK video games development costs. It is too soon to conduct an assessment of VGEC’s impact given it was introduced on 1 January 2024, after which there will be a lag of at least 12 months as accounting periods end and corporation tax returns are filed. An evaluation of the Video Game Tax Relief (VGTR), which VGEC is replacing, was published in July 2017. It can be found here: https://www.gov.uk/government/publications/video-game-tax-relief-evaluation. The government will continue to work with industry to monitor the VGEC and its effectiveness on an ongoing basis.

What steps her Department to ensure that 5% of GDP is spent on defence before 2035.

At the Spending Review, we set budgets taking ‘core’ defence spending to 2.6% by 2027; next Parliament we have an ambition to reach 3% when fiscal and economic conditions allow. Additionally, under the new NATO Defence Investment Pledge, the government has committed to hitting a headline ambition of 5% of GDP in the Parliament after next (2035-36). The 5% will be split into 1.5% of defence and security related spending and 3.5% of core defence spending with the overall ambition, trajectory and split to be reviewed in 2029. We will set out our plans for the next spending review period at Spending Review 2027.

If she will make an assessment of the potential impact of the proposals in her Department’s consultation on the harmonisation of gambling duty rate on the horseracing industry.

The Government consultation on proposals to simplify the current gambling tax system by merging the three current taxes that cover remote (including online) gambling into one closed on 21 July 2025. Responses are now being analysed and a response to the consultation will be published at Autumn Budget 2025. If any changes are made to gambling duties at a future Budget following the consultation, they will be accompanied by a Tax Information and Impact Note which will set out the expected impacts.

If she will make an assessment of the potential impact of the harmonisation of gambling duty rates on levels of promotion of more addictive forms of online gaming.

The Government consultation on proposals to simplify the current gambling tax system by merging the three current taxes that cover remote (including online) gambling into one closed on 21 July 2025. Responses are now being analysed and a response to the consultation will be published at Autumn Budget 2025. If any changes are made to gambling duties at a future Budget following the consultation, they will be accompanied by a Tax Information and Impact Note which will set out the expected impacts.

If she will make an assessment of the potential (a) merits of reducing taxes on developers of brownfield sites and (b) impact of doing so on the regeneration of town centres.

The government has announced reforms to the National Planning Policy Framework that will deliver key steps to get Britain building, and the reforms introduced through the Planning and Infrastructure Bill will streamline the delivery of new housing and regeneration projects.The government has also committed to deliver 1.5 million new homes as part of our mission to achieve economic growth across the country. At Autumn Budget, the government announced over £5 billion total housing investment in 2025-2026 to boost supply.Tax stability is important for investment in regeneration, and the government has committed through the Corporate Tax Roadmap to provide the stability needed for businesses to make investments that are critical to boosting growth in the UK.

What assessment she has made of the potential cumulative impact of her Department's (a) economic forecasting and (b) fiscal rules on economic policy.

The Treasury does not produce economic forecasts. The Office for Budget Responsibility (OBR) is the Government’s independent official economic and fiscal forecaster. The Government uses the forecasts and analysis it produces to inform policy decisions. The OBR will publish its next Economic and Fiscal Outlook on 26 March alongside The Chancellor of the Exchequer’s Spring Statement.The fiscal rules demonstrate the Government’s commitment to fiscal responsibility and help underpin economic stability. The stability and investment rules put the public finances on a sustainable path and prioritise investment to support long term growth.

If she will make an assessment of the potential impact of reducing taxes on the developers of brownfield sites on the development of new homes in town centres.

The government has announced reforms to the National Planning Policy Framework that will deliver key steps to get Britain building, and the reforms introduced through the Planning and Infrastructure Bill will streamline the delivery of new housing and regeneration projects.The government has also committed to deliver 1.5 million new homes as part of our mission to achieve economic growth across the country. At Autumn Budget, the government announced over £5 billion total housing investment in 2025-2026 to boost supply.Tax stability is important for investment in regeneration, and the government has committed through the Corporate Tax Roadmap to provide the stability needed for businesses to make investments that are critical to boosting growth in the UK.

If she will make an assessment of the potential merits of introducing a lower rate of VAT for the hospitality sector.

To support hospitality businesses, the Government intends to introduce permanently lower business rates for retail, hospitality, and leisure (RHL) properties, with Rateable Values below £500,000, from 2026-27. Ahead of these changes being made, the Government recognises that businesses will need support in 2025-26. As such, the Government has prevented the current RHL relief from ending in April 2025, extending it for one year at 40 per cent up to a cash cap of £110,000 per business, and we have frozen the small business multiplier. VAT is the UK’s second largest tax, forecast to raise £171 billion in 2024/25. Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.

If she will make an assessment of the potential impact of establishing a customs union with the EU on town centre businesses in Cheltenham.

No. The Government is working with the EU to identify areas where we can strengthen cooperation for mutual benefit, such as the economy, energy, security and resilience. But we have been clear that there will be no return to the customs union.

If she will make an assessment of the potential impact of establishing a customs union with the EU on the cyber security sector in Cheltenham.

No. The Government is working with the EU to identify areas where we can strengthen cooperation for mutual benefit, such as the economy, energy, security and resilience. But we have been clear that there will be no return to the customs union.