Written questions by Savage.

What assessment she has made of the impact of current fuel duty levels on the agricultural sector; and whether she is considering any temporary reductions or exemptions for red diesel used in farming.

Farmers retained the entitlement to use red diesel for agricultural machinery after it was withdrawn from most sectors in 2022. Red diesel used in agriculture is subject to fuel duty at just 10.18p per litre compared to 52.95p for diesel used on roads, representing savings of almost £300m p.a. At Budget 2025, the Government extended the temporary 5p fuel duty cut alongside extending the proportionate percentage cut for rebated fuels, which includes red diesel. This maintains the red diesel rate at the levels set in March 2022 at 10.18p per litre until the end of August 2026, with rates then gradually returning to March 2022 levels by March 2027, an increase of less than 1p a litre. The planned inflation increase for 2026-27 has also been cancelled.The Government keeps fuel duty under review.As the Chancellor has set out, a rapid de-escalation in the Middle East remains the best way to bring down fuel prices but the Government will also take the necessary decisions to help families with the cost of living and protect the public finances.

What proportion of VAT penalties issued in the 2024-25 financial year were subsequently (a) overturned or (b) cancelled on appeal.

The information you have requested can be found here: 2024-25 HMRC Annual Reports and Accounts and here: 2024-25 Tax Assurance Commissioners Report

How many HMRC online accounts were reported as (a) compromised or (b) subject to unauthorised access in each of the last three financial years.

Information relating to suspected or confirmed account compromise is recorded across different systems and teams, reflecting variation in how fraud presents across HMRC services and channels. As a result, HMRC is unable to provide a comprehensive breakdown of the number of accounts reported as compromised or subject to unauthorised access for each of the last three financial years in the format requested.HMRC continues to strengthen its capability to identify, respond to and manage compromised accounts, including improving incident management processes and developing more joined‑up approaches to monitoring and response across services.

What policy HMRC follows on suspending automated penalty notices and enforcement action in cases where a taxpayer's account has been compromised by a third party.

Since May 2025, HMRC has seen a significant increase in VAT fraud attempts relating to criminals compromising legitimate customer accounts. HMRC security teams actively investigate these incidents and work with experts across the department to continually strengthen the security of online services. HMRC’s approach is to identify and prevent fraud upstream by strengthening perimeter controls to prevent fraudulent access to systems, applying effective risk‑based controls at the point of registration and repayment, and targeting the organised criminal groups behind these attacks. HMRC’s Cybercrime team works proactively to understand these threats and identify those responsible. Where HMRC identifies that a taxpayer’s VAT account has been compromised by a third party, the department takes action to lock the digital account to prevent further unauthorised access and to mitigate any adverse impact on the customer. HMRC contacts the customer to explain what has occurred, the action taken to correct their account, and any steps the customer needs to take. Until recently, customers were asked to appeal any penalties or interest incurred. However, the process has been adjusted so that any incorrect penalties are now inhibited and removed. Once the customer regains access to their account, HMRC provides appropriate support and allows additional time for the customer to submit updates and returns without accruing penalties.

What guidance HMRC issues to third-party debt collection agencies acting on its behalf to recover debts subject to (a) an active dispute or (b) an unresolved fraud investigation.

HMRC does not place tax debts that are either in an active dispute or part of an unresolved investigation with debt collection agencies (DCAs). If a taxpayer communicates to a DCA that their debt is part of an active dispute, which could include being part of an open investigation, the guidance states that the case should be returned to HMRC

What steps HMRC is taking to improve information-sharing between its fraud investigation and customer service functions in cases involving compromised taxpayer accounts.

HMRC is establishing the Fraud Prevention Centre (FPC), a multifunctional capability led by HMRC’s Security directorate, to improve coordination between customer service, fraud investigation and security teams when taxpayer accounts are compromised. Through the FPC, HMRC is improving customer reporting routes, strengthening incident management processes across teams, and deploying targeted technical enhancements to support more joined-up handling of cases and enhanced support for affected customers.

What estimate she has made of the timescale for resolving outstanding cases involving individuals subject to the Loan Charge that will be settled following the conclusions of the independent review led by Ray McCann.

This Government recognised that concerns were raised about the Loan Charge under the previous government and that some felt strongly that it had not been handled appropriately. The Government therefore commissioned an independent review of the loan charge to bring the matter to a close for those who had not settled and paid their loan charge liabilities. The Government accepted the review’s conclusion that the loan charge was an extraordinary piece of Government policy which necessitated an exceptional response, and is now legislating to give HMRC the power to administer a new settlement opportunity. To encourage more people to settle, the Government will write off the first £5,000 of liabilities in addition to the proposals put forward by Ray McCann. As a result, most individuals could see reductions of at least 50% in their outstanding loan charge liabilities, and an estimated 30% of individuals could have these liabilities written off entirely. HMRC began contacting taxpayers to notify them of their eligibility for the new settlement opportunity from January 2026. HMRC will begin contacting them again, from Spring, to explain the settlement opportunity in more detail. HMRC will contact taxpayers in stages and all taxpayers in scope will be invited to settle by the end of the 2027-28 tax year. HMRC will encourage taxpayers who want to settle to contact their named HMRC caseworker proactively, and not to wait for a letter. Taxpayers that contact HMRC will be prioritised for settlement.

Whether she plans to reform beer duty by reducing duty on beer sold in barrels while increasing duty on bottled beer; and what assessment she has made of the potential impact of such an approach on (a) supporting pubs and local breweries, (b) reducing packaging and recycling waste and (c) encouraging alcohol consumption in supervised settings.

A new duty structure for alcohol products was introduced in August 2023. This included the introduction of Draught Relief, which enables products served on draught below 8.5% alcohol by volume (ABV) to pay less duty. This relief provides vital support to pubs and other venues, whilst also helping breweries that supply eligible products. This Government is proud to have been able to expand the generosity of Draught Relief this parliament. The Chancellor’s draught rate cut announced at Autumn Budget 2024 applied to approximately 60% of the alcoholic drinks sold in pubs, with draught beer and cider now paying 13.9% less in duty than their packaged equivalents. The Chancellor makes decisions on future tax policy at fiscal events, and, as with all taxes, the Government keeps alcohol duty under review as part of its Budget process. This Government is also committed to moving towards a circular economy that delivers sustainable growth, and produces less waste, rubbish and litter. Implementing the Government’s Collection and Packaging Reforms, including Packaging Extended Producer Responsibility (pEPR) and the Deposit Return Scheme, is a critical step in this transition that will create a substantial incentive for investment in new and improved recycling services in the UK.

Whether she has made an assessment of the potential merits of introducing sector-specific business rates relief and reform for indoor leisure and soft play facilities.

I refer you to my previous answer to PQ 111499.

What assessment HM Treasury has made of the potential impact of Stamp Duty Land Tax surcharges on additional properties on levels of long-term participation in the private rented sector.

The Higher Rates for Additional Dwellings (HRAD) within Stamp Duty Land Tax (SDLT) ensure that those looking to purchase a first property or move home have an advantage over second home buyers, landlords and companies purchasing residential property.

Whether HM Treasury has considered aligning Capital Gains Tax relief with longer-term rental commitments in order to support the stability objectives of the Renters’ Rights Act 2025.

Tenant wellbeing is central to the Government’s recent Renters’ Rights Act, which will transform the experience of private renting, including by ending Section 21 ‘no fault’ evictions. The Act will give renters much greater security and stability so they can stay in their homes for longer. Capital gains are taxed because they represent profits from the sale of capital assets, including second homes and buy-to-let properties, and it would be unfair to tax other sources of income but not capital gains.

What consideration is given within the business rates valuation methodology to the revenue-generating capacity and operating margins of community-focused leisure businesses, compared with warehousing, office space, and large-scale logistics operators.

Rateable values reflect the rental value of a property at a set valuation date. The valuation methodology used depends on the type of property, and the evidence available. The Valuation Office Agency use recognised valuation methods approved by the Royal Institution of Chartered Surveyors (RICS). These have been clarified and confirmed by decisions from the courts over many years.

What assessment her Department has made of the potential impact of business rates revaluations on indoor leisure and soft play businesses operating from large premises.

I refer you to my previous answer to PQ 111499.

What assessment she has made of the potential impact of the business rates system on (a) high street hospitality businesses and (b) large online retailers; and whether she plans to reform business rates to support physical businesses such as pubs.

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. In recognition of the impact of the revaluation on bills, the Government introduced a support package worth £4.3 billion, to protect against ratepayers seeing large overnight increases in bills. 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. We are paying for this through higher rates on the top one per cent of most expensive properties. This includes many large distribution warehouses, such as those used by online giants. The high value multiplier is 33% more than the multiplier for small RHL properties. From April, every pub and live music venue will get 15% off its new business rates bill on top of the support announced at Budget and then bills will be frozen in real terms for a further two years. Three-quarters of pubs will see bills flat or falling in April. The new relief is worth £1,650 for the average pub next year. As a sector pubs will pay 8% less in business rates in 2029 than they do right now. The Government will also launch a review on how pubs are valued for business rates.

What comparative assessment she has made of the potential impact of alcohol duty policy on on-trade venues such as pubs, with off-trade alcohol sales in supermarkets.

The importance of the 'on-trade' is recognised in the alcohol duty system via Draught Relief, which ensures eligible products served on draught pay less duty than their packaged equivalents. The Chancellor significantly increased the generosity of this relief at Autumn Budget 2024, taking a penny of duty off a typical strength pint and reducing overall duty receipts by £85m. Draught beer and cider now pay 13.9% less in tax than their packaged equivalents – a 50% increase on the draught discount under the previous government (9.2%). At Autumn Budget 2025, the Chancellor confirmed that alcohol duty would be uprated on 1 February 2026 to maintain its real-terms value. The government does not expect this to have any significant impact on competition between the on- and off-trades. An assessment of the impacts of the inflation-linked uprating at the most recent Budget is published within the Tax Impact and Information Note (TIIN) here:  https://www.gov.uk/government/publications/alcohol-duty-rates-change/alcohol-duty-uprating#summary-of-impacts.

What assessment her Department has made of the potential impact of business rates revaluation on village pubs and hospitality venues in rural areas.

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. In recognition of the impact of the revaluation on bills, the Government introduced a support package worth £4.3 billion, to protect against ratepayers seeing large overnight increases in bills. 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. From April, every pub will also get 15% off its new business rates bill on top of the support announced at Budget and then bills will be frozen in real terms for a further two years. Three-quarters of pubs will see bills flat or falling in April. The new relief is worth £1,650 for the average pub next year. As a sector pubs will pay 8% less in business rates in 2029 than they do right now. Rural Rate Relief also continues to be available for key amenities and community assets in rural areas. It provides 100% rate relief for properties that are based in eligible rural areas with populations below 3,000.

What assessment she has made of the potential cumulative impact of business rates, minimum wage increases, VAT, energy costs and alcohol duty on the viability of small and independently owned pubs.

The Government recognises the important contribution that small and independently owned pubs make to local communities, the high street and the wider economy. The potential impacts of changes on this sector are carefully considered as part of policy development. Where changes are made, relevant impact notes and assessments are published at fiscal events and otherwise as necessary, in line with the Government’s usual practice. The Treasury also engages regularly with the pub and wider hospitality sector to understand the challenges they face. The Government continues to provide targeted support to the pub sector through the tax system and other policies, and keeps all areas of the tax system under review, with future decisions taken at fiscal events under the normal process.

What assessment she has made of the potential merits of introducing additional business rates relief for community pubs that operate as the sole hospitality venue in rural villages.

The Government already provides a series of business rate reliefs that eligible pubs in rural villages may benefit from. In addition to the support announced at Budget, the Government recently announced a 1-year 15% relief for all pubs from April 2026. This will mean around three quarters of pubs will see their bills either falling or remaining the same next year. For the following two years, their bills will then be frozen in real terms. Pubs in rural areas may also benefit from either Rural Rate Relief or Small Business Rate Relief. Rural Rate Relief aims to ensure that key amenities are available and community assets are protected in rural areas. It provides 100% rate relief for properties that are based in eligible rural areas with populations below 3,000. Properties that are eligible for Small Business Rate Relief, which is available to businesses with a single property below a Rateable Value of £12,000, will receive 100 per cent relief.

Whether she has conducted a comparative assessment of the potential impact of (a) VAT rates on food and drink served in pubs compared with (b) VAT rates applied in comparable European countries.

The Government recognises the significant contribution made by pubs 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. Reduced rates of VAT come at a significant cost to the Exchequer, reduce the revenue available for vital public services, and must represent value for money for the taxpayer. HMRC estimates that the cost of reducing the 20 per cent standard rate of VAT on all accommodation and food and beverage services would be as follows in 2026-27: (a) to 15%: £5 billion, (b) to 12.5%: £8 billion (c) to 10%: £10.5 billion, (d) to 5%: £17 billion, (e) to 0%: £23.5 billion. The Government is aware that some European countries apply reduced VAT rates to hospitality, reflecting different tax systems and policy choices. The Government keeps all taxes under review, with decisions on VAT rates taken by the Chancellor at fiscal events.

How many recipients of the pre-2016 State Pension have been issued with a simple assessment tax demand in each of the last three tax years.

Revenue estimates from, and individuals impacted by frozen thresholds are set out by the Office for Budget Responsibility in Table A of their November 2025 Economic and fiscal outlook, and Table 3.19 of the detailed forecast table of receipts: Office for Budget Responsibility – Economic and fiscal outlook – November 2025 Office for Budget Responsibility - Economic and fiscal outlook detailed forecast tables: receipts Those whose sole income is the basic or full new State Pension without any increments will not pay any income tax in 2026/27.