Written questions by Bhatti.

What consultation (a) her Department and (b) the Valuation Office Agency undertook with the (i) flexible workspace sector and (ii) representatives of small businesses prior to concluding that most serviced offices should be assessed as a single property for business rates purposes.

Following developments in case law and legal advice, the VOA has reviewed its approach and concluded that most serviced offices will need to be assessed as a single property. The VOA has engaged with the sector and rating agents to discuss the approach to assessing serviced offices. In line with legal obligations, the VOA is working through outstanding Checks and Challenges on serviced offices. For serviced offices that are new to the Rating List or subject to Checks and Challenges, the starting position is to treat them as a single assessment, unless there is clear evidence to support separate assessments. The VOA will apply the law to the facts on a case-by-case basis.

What assessment (a) her Department and (b) the Valuation Office Agency has made of the potential impact of changing the business rates valuation methodology for serviced offices from multiple hereditaments to a single hereditament model on (i) small businesses and (ii) flexible workspace operators.

Following developments in case law and legal advice, the VOA has reviewed its approach and concluded that most serviced offices will need to be assessed as a single property. The VOA has engaged with the sector and rating agents to discuss the approach to assessing serviced offices. In line with legal obligations, the VOA is working through outstanding Checks and Challenges on serviced offices. For serviced offices that are new to the Rating List or subject to Checks and Challenges, the starting position is to treat them as a single assessment, unless there is clear evidence to support separate assessments. The VOA will apply the law to the facts on a case-by-case basis.

What estimate she has made of the cost to the public purse of removing the £110,000 business rates cap for (a) retail, (b) hospitality and (c) leisure businesses with a rateable value below £500,000 after April 2026; and how this will be funded.

To deliver our manifesto pledge, we intend to introduce permanently lower tax rates for retail, hospitality, and leisure (RHL) properties, with rateable vales below £500,000 from 2026-27. This permanent tax cut will ensure that RHL businesses benefit from much-needed certainty and support.This tax cut must be sustainably funded, and so we intend to introduce a higher rate on the most valuable properties from 2026-27 - those with rateable values of £500,000 and above. These represent less than one per cent of all properties, but cover the majority of large distribution warehouses, including those used by online giants.The exact rates for any new business rate multipliers will not be set until Autumn Budget 2025 so that the Government can take into account the revaluation outcomes as well as the economic and fiscal context. Costings for these policies will be certified by the Office for Budget Responsibility and published at the Budget.

What estimate she has made of the maximum additional business rate revenue that could be raised by the proposed new higher rate multiplier.

To deliver our manifesto pledge, we intend to introduce permanently lower tax rates for retail, hospitality, and leisure (RHL) properties, with rateable vales below £500,000 from 2026-27. This permanent tax cut will ensure that RHL businesses benefit from much-needed certainty and support.This tax cut must be sustainably funded, and so we intend to introduce a higher rate on the most valuable properties from 2026-27 - those with rateable values of £500,000 and above. These represent less than one per cent of all properties, but cover the majority of large distribution warehouses, including those used by online giants.The exact rates for any new business rate multipliers will not be set until Autumn Budget 2025 so that the Government can take into account the revaluation outcomes as well as the economic and fiscal context. Costings for these policies will be certified by the Office for Budget Responsibility and published at the Budget.

What estimate her Department has made of the potential impact of business rates relief on supply of serviced office buildings.

The Valuation Office Agency (VOA) is responsible for valuing non-domestic property for business rates purposes. At present many serviced offices are valued as separate units. This means that businesses occupying serviced office units are liable for business rates. Where eligible, these businesses may claim Small Business Rate Relief (SBRR). SBRR provides 100 per cent rate relief for properties with rateable values below £12,000, and tapered support to those with rateable values below £15,000.

What assessment she has made of the the potential impact of changes in business rates on serviced office buildings.

It is the Valuation Office Agency’s (VOA) statutory duty to maintain up-to-date Rating Lists and they are required by law to review and correct assessments if supported by evidence. Following developments in case law, the VOA have been reviewing their approach to valuing serviced offices for business rates, including seeking legal advice on a range of agreements between owners or operators and individual occupiers. 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 split.

What steps she is taking to ensure that Gift Aid claimed by online fundraising platforms goes to charities.

Charities have the flexibility to decide on their own strategy for fundraising and are free to partner with other organisations to process their Gift Aid claims. It will ultimately be a commercial decision on the part of a charity to work with a fundraising platform and whether it is appropriate to pay a fee for any services provided.Many of the fundraising platforms are voluntarily registered with the Fundraising Regulator which can act if it believes standards have been breached.

If she will take steps to ban the charging of commission on Gift Aid.

Charities have the flexibility to decide on their own strategy for fundraising and are free to partner with other organisations to process their Gift Aid claims. It will ultimately be a commercial decision on the part of a charity to work with a fundraising platform and whether it is appropriate to pay a fee for any services provided.Many of the fundraising platforms are voluntarily registered with the Fundraising Regulator which can act if it believes standards have been breached.

Whether she has made a recent assessment of the international competitiveness of air passenger duty.

Air Passenger Duty (APD) applies to airlines and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25. At Autumn Budget 2024, the Government announced Air Passenger Duty (APD) rates for 2026-27, including a partial adjustment to help compensate for two recent years of inflation that was higher than expected. APD rates are set in advance using forecasts of inflation, and so with actual inflation being significantly greater than forecast in 2022 and 2023, APD rates fell in real terms. The Government is clear that APD is an appropriate tax that ensures airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. Other countries also have different forms of aviation taxes. The Government keeps all taxes under review.

What estimate she has made of total revenue generated by Air Passenger Duty from children aged under 16 years old who travelled in Premium Economy in each of the last three years?.

Air Passenger Duty (APD) applies to airlines, not individual passengers, and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25 and it aims to ensure that airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. The distance-based band structure ensures that those who travel furthest, and in the greatest comfort, incur a greater tax liability. Children under 16 years old on the date of the flight, and in the lowest class of travel, are exempt from APD. This means that no APD will be paid on that passenger by the airline to the UK government. If children under 16 years old are travelling in any other class (such as premium economy) or in business jets, they are not exempt. Children under 2 years old without a seat are exempt from Air Passenger Duty for all classes of travel. Airline operators declare the number of chargeable passengers by destination band and by rate. They do not break down chargeable passengers by age, and therefore this is not information that HMRC collects. The government has published annual statistics and analysis on airline passenger numbers and Air Passenger Duty (APD) receipts in the UK which are administered by HM Revenue and Customs. It is available at: https://www.gov.uk/government/statistics/air-passenger-duty-bulletin. As with all taxes, APD is kept under review and any changes are announced by the Chancellor at fiscal events.

If she will make a comparative assessment of the Standard Rate of Air Passenger Duty between the UK and (a) Germany, (b) France, (c) Italy and (d) Spain.

Air Passenger Duty (APD) applies to airlines and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25. At Autumn Budget 2024, the Government announced Air Passenger Duty (APD) rates for 2026-27, including a partial adjustment to help compensate for two recent years of inflation that was higher than expected. APD rates are set in advance using forecasts of inflation, and so with actual inflation being significantly greater than forecast in 2022 and 2023, APD rates fell in real terms. The Government is clear that APD is an appropriate tax that ensures airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. Other countries also have different forms of aviation taxes. The Government keeps all taxes under review.

What estimate she has made of the cost to the exchequer of extending the Air Passenger Duty exemption for children under 16 years old to (a) Premium Economy and (b) any other cabin class travel.

Air Passenger Duty (APD) applies to airlines, not individual passengers, and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25 and it aims to ensure that airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. The distance-based band structure ensures that those who travel furthest, and in the greatest comfort, incur a greater tax liability. Children under 16 years old on the date of the flight, and in the lowest class of travel, are exempt from APD. This means that no APD will be paid on that passenger by the airline to the UK government. If children under 16 years old are travelling in any other class (such as premium economy) or in business jets, they are not exempt. Children under 2 years old without a seat are exempt from Air Passenger Duty for all classes of travel. Airline operators declare the number of chargeable passengers by destination band and by rate. They do not break down chargeable passengers by age, and therefore this is not information that HMRC collects. The government has published annual statistics and analysis on airline passenger numbers and Air Passenger Duty (APD) receipts in the UK which are administered by HM Revenue and Customs. It is available at: https://www.gov.uk/government/statistics/air-passenger-duty-bulletin. As with all taxes, APD is kept under review and any changes are announced by the Chancellor at fiscal events.

Whether she plans to reform Air Passenger Duty to extend the exemption for children under 16 years old to travel in Premium Economy or any other cabin classes.

Air Passenger Duty (APD) applies to airlines, not individual passengers, and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25 and it aims to ensure that airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. The distance-based band structure ensures that those who travel furthest, and in the greatest comfort, incur a greater tax liability. Children under 16 years old on the date of the flight, and in the lowest class of travel, are exempt from APD. This means that no APD will be paid on that passenger by the airline to the UK government. If children under 16 years old are travelling in any other class (such as premium economy) or in business jets, they are not exempt. Children under 2 years old without a seat are exempt from Air Passenger Duty for all classes of travel. Airline operators declare the number of chargeable passengers by destination band and by rate. They do not break down chargeable passengers by age, and therefore this is not information that HMRC collects. The government has published annual statistics and analysis on airline passenger numbers and Air Passenger Duty (APD) receipts in the UK which are administered by HM Revenue and Customs. It is available at: https://www.gov.uk/government/statistics/air-passenger-duty-bulletin. As with all taxes, APD is kept under review and any changes are announced by the Chancellor at fiscal events.

Whether she plans to reform Air Passenger Duty to prevent passengers travelling in a Premium Economy cabin from paying the same rate as passengers travelling in a First Class and Business Class cabin.

Air Passenger Duty (APD) applies to airlines, not individual passengers, and is the principal tax on the aviation sector. It is expected to raise £4.2 billion in 2024-25 and it aims to ensure that airlines make a fair contribution to the public finances, particularly given that tickets are VAT free and aviation fuel incurs no duty. The distance-based band structure ensures that those who travel furthest, and in the greatest comfort, incur a greater tax liability. There are three rates of duty for each destination band depending on the class of travel. The reduced rate applies to all travel in the lowest class of travel available on the plane for seat pitches less than 1.016 metres. The standard rate applies to travel in any non-economy class of travel or where the seat pitch is more than 1.016 metres (40 inches). This includes premium economy, as well as first class and business class. When making changes to taxes the Government has to consider a wide range of factors, including administrative burdens and complexity. The Government keeps all taxes under review.

If she will make an assessment of the potential merits of permanently reducing business rates for grassroots music venues.

As set out at Autumn Budget 2024, the Government intends to introduce permanently lower tax rates for retail, hospitality, and leisure (RHL) properties from 2026-27 for properties with rateable values below £500,00. This permanent tax cut will ensure that they benefit from much-needed certainty and support. The Government intends to fund this by introducing a higher multiplier on all properties with a rateable value (RV) of £500,000 and above. In the interim period, for 2025-26, we have prevented the current RHL relief from ending in April 2025, extending it for one year at 40% up to a cash cap of £110,000 per business. The Culture, Media and Sport (CMS) Committee’s report on grassroots music venues recommended that RHL relief should not be wholly withdrawn in April 2025. The Committee’s report also highlighted the sector's desire for certainty and long-term stability. That is why the Government intends to introduce permanently lower tax rates for high street RHL properties from 2026-27. The Government’s full response to the CMS Committee’s report was published on 14 November 2024 and is available online: https://committees.parliament.uk/work/8227/grassroots-music-venues/publications/.

What assessment she has made of the potential impact of increased borrowing costs on the UK's debt repayments.

The government does not comment on specific financial market movements. Gilt yields are determined by a wide range of international and domestic factors, and it is normal for the price and yields of gilts to vary when there are wider movements in global financial markets. The Chancellor has commissioned the Office for Budget Responsibility for an updated economic and fiscal forecast for the 26th of March, which will incorporate the latest data.

What assessment she has made of the potential impact of increased borrowing costs on the UK's debt repayments.

The government does not comment on specific financial market movements. Gilt yields are determined by a wide range of international and domestic factors, and it is normal for the price and yields of gilts to vary when there are wider movements in global financial markets. The Chancellor has commissioned the Office for Budget Responsibility for an updated economic and fiscal forecast for the 26th of March, which will incorporate the latest data.

What assessment she has made of the potential impact of higher bond yields on mortgage repayments.

The government does not comment on specific financial market movements. Gilt yields are determined by a wide range of international and domestic factors, and it is normal for the price and yields of gilts to vary when there are wider movements in global financial markets. The Chancellor has commissioned the Office for Budget Responsibility for an updated economic and fiscal forecast for the 26th of March, which will incorporate the latest data. The pricing of mortgages, which is influenced by a number of factors, is a commercial decision for lenders in which the Government does not intervene. It is worth noting that, at present, average mortgage rates are well below the recent peaks seen in Summer 2023 and Autumn 2022.

Whether she plans to take steps with the Valuation Office Agency to introduce new valuation methods for business rates for grassroots music venues.

As set out at Autumn Budget 2024, the Government intends to introduce permanently lower tax rates for retail, hospitality, and leisure (RHL) properties, including those on the high street, from 2026-27. This permanent tax cut will ensure that they benefit from much-needed certainty and support. In the interim period, for 2025-26, we have prevented the current RHL relief from ending in April 2025, extending it for one year at 40% up to a cash cap of £110,000 per business. Music venues are valued in the same way as any other class of non-domestic property; through applying the statutory and common law principles that apply across non-domestic rating. The valuation approach adopted by the Valuation Office Agency follows one of the established three methods of valuation for rating - rentals, receipts and expenditure, or contractors (cost based). In most cases, the method adopted will be derived from rental evidence directly from the property, or from similar properties that share comparable physical characteristics.