Written questions by Timothy.

If her Department will take steps to improve the accuracy of (a) identifying and (b) reporting data on fraud as distinct from administrative error.

As with other parts of the tax system, the term ‘error and fraud’ includes this full range of behaviours, from mistakes and failure to take reasonable care, through to deliberate non-compliance. The Government is committed to further enhancing the administration of R&D tax reliefs. To support this, HMRC published a consultation on 26 March to explore widening the use of advance clearances in the reliefs to help further reduce error and fraud, while also improving the customer experience and providing certainty to businesses.

What information her Department holds on the proportion of imports from China that were worth less than £135 in each year since 2015.

Goods valued at £135 or less imported into the UK are not subject to customs duty and are predominantly imported through a simplified customs declaration. As part of this simplified declaration multiple goods can be bulk declared without providing the total number of consignments or country of origin - in other words, the importer is not asked the specific country where the goods were manufactured or wholly obtained. HMRC therefore does not routinely collect customs data on the proportion of imports from China that are worth less than £135. On April 23rd the Government announced a review of the customs treatment of Low Value Imports valued below £135. We intend to engage a broad range of stakeholders over the Spring to further understand their views and gather evidence, including on the volume and nature of low value imports, to support our analysis.

What the average value of shipments worth less than £135 to the UK was in each year since 2015, by country of origin.

Goods valued at £135 or less imported into the UK are not subject to customs duty and are predominantly imported through a simplified customs declaration.As part of this simplified declaration, HMRC does not collect information on the origin of the goods – in other words, the importer is not asked the specific country where the goods were manufactured or wholly obtained.On April 23rd the Government announced a review of the customs treatment of Low Value Imports valued below £135. We intend to engage a broad range of stakeholders over the Spring to further understand their views and gather evidence, including on the volume and nature of low value imports, to support our analysis.

What the total value of shipments worth less than £135 to the UK was in each year since 2015, by country of origin.

Goods valued at £135 or less imported into the UK are not subject to customs duty and are predominantly imported through a simplified customs declaration.HMRC can only provide the overall value of shipments containing goods under £135, as data on country of origin is not collected as part of the simplified customs declaration - in other words, the importer is not asked the specific country where the goods were manufactured or wholly obtained.It was not mandatory to provide the total aggregate value as part of the simplified customs declaration until 2023. In 2024, £5.8bn worth of goods under £135 were declared through the Customs Declarations System (CDS).On April 23rd the Government announced a review of the customs treatment of Low Value Imports valued below £135. We intend to engage a broad range of stakeholders over the Spring to further understand their views and gather evidence, including on the volume and nature of low value imports, to support our analysis.

If she will make an estimate of the average cost for businesses applying for R&D tax relief.

In October 2024, HMRC released operational data in the Approach to Research & Development Tax Reliefs 2023-2024 publication. This includes data from 2022-2023 and 2023-2024 on the number of R&D enquiries, the proportion of claims requiring adjustment and data on appeals. This publication represents the most comprehensive data on R&D compliance activity and is not available for previous years. This publication also included customer service data on processing times and the average time to complete a compliance check. HMRC processed 92% of claims within 40 days in 2023-2024. Processing means paying the claim, making contact to request further information, or refusing the claim, and, for claims identified as high-risk, starting an appropriately targeted compliance check. The table below provides final and illustrative estimates of the cost of error and fraud in the R&D tax reliefs since 2020-2021. Final estimates 2020-2021 (£m)Final estimates 2021-2022 (£m)Illustrative estimate 2022-2023 (£m)Illustrative estimate 2023-2024 (£m)SME scheme1,0381,2031,003475RDEC scheme9013448125Overall1,1271,3371,050601 The Mandatory Random Enquiry Programme approach introduced for small and medium sized enterprises represents good practice in the measurement of error and fraud, and involves a detailed inspection of a representative sample of claims filed. These estimates are published in HMRC Annual reports and Accounts and previous reports can be found at gov.uk at: HMRC’s Annual reports and Accounts.

How many R&D tax relief claims have been rejected in each year since 2015; and how many of those have been successfully appealed.

In October 2024, HMRC released operational data in the Approach to Research & Development Tax Reliefs 2023-2024 publication. This includes data from 2022-2023 and 2023-2024 on the number of R&D enquiries, the proportion of claims requiring adjustment and data on appeals. This publication represents the most comprehensive data on R&D compliance activity and is not available for previous years. This publication also included customer service data on processing times and the average time to complete a compliance check. HMRC processed 92% of claims within 40 days in 2023-2024. Processing means paying the claim, making contact to request further information, or refusing the claim, and, for claims identified as high-risk, starting an appropriately targeted compliance check. The table below provides final and illustrative estimates of the cost of error and fraud in the R&D tax reliefs since 2020-2021. Final estimates 2020-2021 (£m)Final estimates 2021-2022 (£m)Illustrative estimate 2022-2023 (£m)Illustrative estimate 2023-2024 (£m)SME scheme1,0381,2031,003475RDEC scheme9013448125Overall1,1271,3371,050601 The Mandatory Random Enquiry Programme approach introduced for small and medium sized enterprises represents good practice in the measurement of error and fraud, and involves a detailed inspection of a representative sample of claims filed. These estimates are published in HMRC Annual reports and Accounts and previous reports can be found at gov.uk at: HMRC’s Annual reports and Accounts.

What the average delay in payment for businesses applying for R&D tax relief was in the latest period for which data is available.

In October 2024, HMRC released operational data in the Approach to Research & Development Tax Reliefs 2023-2024 publication. This includes data from 2022-2023 and 2023-2024 on the number of R&D enquiries, the proportion of claims requiring adjustment and data on appeals. This publication represents the most comprehensive data on R&D compliance activity and is not available for previous years. This publication also included customer service data on processing times and the average time to complete a compliance check. HMRC processed 92% of claims within 40 days in 2023-2024. Processing means paying the claim, making contact to request further information, or refusing the claim, and, for claims identified as high-risk, starting an appropriately targeted compliance check. The table below provides final and illustrative estimates of the cost of error and fraud in the R&D tax reliefs since 2020-2021. Final estimates 2020-2021 (£m)Final estimates 2021-2022 (£m)Illustrative estimate 2022-2023 (£m)Illustrative estimate 2023-2024 (£m)SME scheme1,0381,2031,003475RDEC scheme9013448125Overall1,1271,3371,050601 The Mandatory Random Enquiry Programme approach introduced for small and medium sized enterprises represents good practice in the measurement of error and fraud, and involves a detailed inspection of a representative sample of claims filed. These estimates are published in HMRC Annual reports and Accounts and previous reports can be found at gov.uk at: HMRC’s Annual reports and Accounts.

If she will make an estimate of the cost to the public purse of (a) fraud and (b) error related to R&D tax relief in each year since 2015.

In October 2024, HMRC released operational data in the Approach to Research & Development Tax Reliefs 2023-2024 publication. This includes data from 2022-2023 and 2023-2024 on the number of R&D enquiries, the proportion of claims requiring adjustment and data on appeals. This publication represents the most comprehensive data on R&D compliance activity and is not available for previous years. This publication also included customer service data on processing times and the average time to complete a compliance check. HMRC processed 92% of claims within 40 days in 2023-2024. Processing means paying the claim, making contact to request further information, or refusing the claim, and, for claims identified as high-risk, starting an appropriately targeted compliance check. The table below provides final and illustrative estimates of the cost of error and fraud in the R&D tax reliefs since 2020-2021. Final estimates 2020-2021 (£m)Final estimates 2021-2022 (£m)Illustrative estimate 2022-2023 (£m)Illustrative estimate 2023-2024 (£m)SME scheme1,0381,2031,003475RDEC scheme9013448125Overall1,1271,3371,050601 The Mandatory Random Enquiry Programme approach introduced for small and medium sized enterprises represents good practice in the measurement of error and fraud, and involves a detailed inspection of a representative sample of claims filed. These estimates are published in HMRC Annual reports and Accounts and previous reports can be found at gov.uk at: HMRC’s Annual reports and Accounts.

If she will make an estimate of the cost to the public purse of processing R&D tax relief (a) applications, (b) rejections and (c) appeals in each year since 2015.

In October 2024, HMRC released operational data in the Approach to Research & Development Tax Reliefs 2023-2024 publication. This includes data from 2022-2023 and 2023-2024 on the number of R&D enquiries, the proportion of claims requiring adjustment and data on appeals. This publication represents the most comprehensive data on R&D compliance activity and is not available for previous years. This publication also included customer service data on processing times and the average time to complete a compliance check. HMRC processed 92% of claims within 40 days in 2023-2024. Processing means paying the claim, making contact to request further information, or refusing the claim, and, for claims identified as high-risk, starting an appropriately targeted compliance check. The table below provides final and illustrative estimates of the cost of error and fraud in the R&D tax reliefs since 2020-2021. Final estimates 2020-2021 (£m)Final estimates 2021-2022 (£m)Illustrative estimate 2022-2023 (£m)Illustrative estimate 2023-2024 (£m)SME scheme1,0381,2031,003475RDEC scheme9013448125Overall1,1271,3371,050601 The Mandatory Random Enquiry Programme approach introduced for small and medium sized enterprises represents good practice in the measurement of error and fraud, and involves a detailed inspection of a representative sample of claims filed. These estimates are published in HMRC Annual reports and Accounts and previous reports can be found at gov.uk at: HMRC’s Annual reports and Accounts.

What assessment her Department has made of the potential impact of introducing a tiered reserve system on public finances.

The Bank of England has operational independence from the government to carry out its statutory responsibilities for monetary policy and financial stability. Monetary policy, including quantitative easing, is the responsibility of the independent Monetary Policy Committee at the Bank of England. The separation of fiscal and monetary policy is a key feature of the UK’s economic framework, and essential for the effective delivery of monetary policy, so the government does not comment on the conduct or effectiveness of monetary policy.There are no plans to change the way reserves are remunerated at the Bank of England. The government continues to support the Bank to bring inflation in line with its target, including by managing the public finances responsibly.

If she will make an assessment of the potential merits of amending the Bank of England's mandate to maintain fiscal stability.

The Bank of England has operational independence from the government to carry out its statutory responsibilities for monetary policy and financial stability. Monetary policy, including quantitative easing, is the responsibility of the independent Monetary Policy Committee at the Bank of England. The separation of fiscal and monetary policy is a key feature of the UK’s economic framework, and essential for the effective delivery of monetary policy, so the government does not comment on the conduct or effectiveness of monetary policy.There are no plans to change the way reserves are remunerated at the Bank of England. The government continues to support the Bank to bring inflation in line with its target, including by managing the public finances responsibly.

Whether she has had discussions with the Bank of England on a tiered reserve system.

The Bank of England has operational independence from the government to carry out its statutory responsibilities for monetary policy and financial stability. Monetary policy, including quantitative easing, is the responsibility of the independent Monetary Policy Committee at the Bank of England. The separation of fiscal and monetary policy is a key feature of the UK’s economic framework, and essential for the effective delivery of monetary policy, so the government does not comment on the conduct or effectiveness of monetary policy.There are no plans to change the way reserves are remunerated at the Bank of England. The government continues to support the Bank to bring inflation in line with its target, including by managing the public finances responsibly.

What timescales her Department uses to assess public investment in energy infrastructure in (a) oil and gas, (b) wind, (c) solar, (d) hydropower and (e) nuclear.

The costs and benefits of a proposal should be calculated over its entire lifetime. The Green Book states that an appraisal period of 60 years is a standard measure for infrastructure projects. However, it is customary for departments to discuss and agree a suitable appraisal period with the Treasury in advance, based on the lifetime of the proposal.

If she will take steps to simplify the process for requesting a credit freeze from consumer credit reporting companies.

The Financial Conduct Authority (FCA) recently conducted a study on the credit information market — the Credit Information Market Study — to understand how this market operates and assess whether it is working effectively for consumers and lenders. In December 2023, the FCA published the final report for this study, proposing twelve remedies to improve the market. One of the remedies recommends that credit reference agencies (CRAs) streamline the process for consumers to add ‘credit freeze’ markers to their credit reports and ensure these markers are automatically registered across all CRAs. The FCA and industry are jointly establishing a new Credit Reporting Governance Body, which will be responsible for overseeing the sharing of credit information and implementing this recommendation.

Pursuant to the Answer of 17 January to Question 23520 on Ambulance Services: Vehicles, for what reason HMRC issues guidance that ambulance services must sign up to a maintenance package in order to reclaim VAT in relation to the leasing of vehicles.

The government departments’ refund scheme applies to certain specified services that qualifying bodies choose to contract out rather than supply in-house. Where there is a single contract for the hire of a vehicle which includes repair and maintenance, recovery of VAT is allowed where the contract is for more than 30 days. VAT charged on the contracting out of repair and maintenance as a stand-alone service is also recoverable. The hire of vehicles is not a service provided in-house and VAT on the hire alone is not recoverable under the government departments’ refund scheme.

Whether she plans to decolonise the (a) artwork and (b) heritage assets in (i) her Department, (ii) HMRC, (iii) the Valuation Office Agency and (iv) the other arm’s length bodies in her Department.

There has been no change in HM Treasury’s management of artwork or heritage assets since the previous administration.The responsibility for creating policy and guidance for artwork sits with HMRC, the VOA and each individual arm’s length body, rather than HMT.

If she will have discussions with representatives from the banking sector on the adequacy of property valuations for mortgage applications.

The Government is regularly in contact with mortgage lenders on all aspects of their business, including the mortgage application process. The specific details of how property valuations are carried out for mortgage applications is a commercial decision for lenders in which the Government does not intervene.

If her Department will publish an impact assessment for a Carbon Border Adjustment Mechanism on UK exporters.

The aim of the UK CBAM is to ensure imported products are subject to a carbon price comparable to that incurred by UK production, mitigating the risk of carbon leakage. By its very nature, a CBAM can only apply to imported goods, so it cannot mitigate any risk of carbon leakage in export markets. The government will continue to consider whether there is a role for existing or future carbon leakage policies to address the risk associated with exports. Any policies applied to exported products would need to be compliant with the UK’s WTO obligations and our commitment to free and open trade. A more detailed assessment of CBAM impacts on the economy and carbon leakage will be provided before legislation is introduced.

What assessment she has made of the adequacy of the regulation of mortgage brokers.

The Financial Conduct Authority (FCA), which is independent of Government, is responsible for the regulation of mortgage brokers in the UK. Mortgage brokers must either be authorised by the FCA or become an appointed representative of another firm that has the relevant permissions. The FCA is also responsible for monitoring authorised firms, including mortgage brokers, to ensure they comply with its rules and has powers to take action if necessary.

What assessment she has made of the impact of increasing employer’s National Insurance contributions on charities in (a) the East of England and (b) the rest of the UK.

The Government recognises the important role charities play in our society, and has made it a priority to reset the relationship with civil society by developing a Civil Society Covenant.To repair the public finances and help raise the revenue required to increase funding for public services, the government has taken the difficult decision to increase employer National Insurance.The Government recognises the need to protect the smallest businesses and charities, which is why we have more than doubled the Employment Allowance to £10,500, meaning more than half of employers with NICs liabilities either gain or see no change next year. Charities will still be able to claim employer NICs reliefs including those for under 21s and under 25 apprentices, where eligible.More broadly, within the tax system, we provide support to charities through a range of reliefs and exemptions, including reliefs for charitable giving, with more than £6 billion in charitable reliefs provided to charities, CASCs and their donors in 2023 to 2024.