Nigel Huddleston
MP for Droitwich and Evesham · Conservative · United Kingdom
“As you know, Madam Deputy Speaker, I love to do everything I can to support our pubs and hospitality industry—and I do mean everything. I am pleased to represent an area of the country that has many fantastic pubs, many of which are participating in my current “Pub of the Year” competition, and voting is now open.”
“Commercial radio shares much of the same transmission infrastructure as DTT; if there were a switch-off, the costs that are currently shared between television and radio could instead be transferred to radio broadcasters, creating a significant new cost burden from 2035 onwards and potentially increasing transmission costs by more than 50…”
“That will take place in either 2034 or 2044, and it could have a profound impact on remote and rural communities in particular, such as parts of my Droitwich and Evesham constituency. Secondly, I am concerned about the thorny issue of prominence.”
“We have to strike the right balance between ensuring that people can access reliable information and protecting the fundamental freedoms that underpin our democracy. We must be very careful not to drift towards a society in which free speech is constrained, open and honest debate stifled, and the exchange of new ideas discouraged.”
“In a future wartime scenario, the UK might be thankful to have retained the infrastructure required to broadcast to the nation and beyond over distances of hundreds of miles. We then come to the issue of prominence.”
“It is a pleasure to serve under your chairmanship, Dr Allin-Khan. I refer Members to my entry in the Register of Members’ Financial Interests, and I congratulate my right hon. Friend the Member for Maldon (Sir John Whittingdale) on securing today’s debate.”
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“It is a meaningful amount of money for a large number of people, and it comes on top of the many other support measures that we have introduced. I thank the hon. Member for Ealing North for pointing out the easements and the fact that there will be automatic backdating. Hopefully, that will be a relief and good news, and be positive for many families. Child benefit is normally backdated by three months, but because of the timing of the implementation, some could overlap two tax years. We are trying to make that simple and bring it into one tax year. The hon. Gentleman mentioned the increase from £60,000 to £80,000 and the impact on marginal rates.”
“Gentleman will be well aware that, as we have discussed on multiple occasions, the reason why taxes are higher than any of us would desire is the level of intervention required to support households and livelihoods during the pandemic and, more recently, the cost of living challenges since the invasion of Ukraine and the energy price shocks in particular. I would make a similar point to the hon. Member for Inverness, Nairn, Badenoch and Strathspey, who also made those points. I remind him that we have made interventions in cost of living support to the tune of about £100 billion. With respect, half a million people will benefit from the changes that we are introducing. HICBC is not a small amount.”
“I thank my opposite numbers for their comments. I respectfully disagree with several of their points, and I will remind my opposite number, the hon. Member for Ealing North—as I do on almost every occasion—of the significant changes to the income tax threshold that the Conservative Government have brought in. It was £6,475 under Labour; it is now £12,570. That is a significant increase and it has taken many people out of paying income tax altogether, which is something we are very proud of. The hon.”
“The measure also changes the definition of first-time buyers to ensure that individuals who use such arrangements cannot claim relief more than once. First-time buyers’ relief from SDLT is available where an individual who has not previously owned a dwelling purchases a home they intend to use as their only or main residence, but that is not currently available to individuals purchasing a new residential lease through a nominee or bare trustee. The changes made by clause 8 will benefit certain first-time buyers of residential leasehold properties purchasing through a nominee or bare trustee, reducing the up-front cost of buying a home by allowing them to claim the relief they are entitled to. The changes bring those purchasers in line with purchases of residential freeholds and pre-existing leases using similar arrangements.”
“It will only increase the stamp duty payable by individuals or businesses purchasing two or more properties in a single transaction or as part of the same deal. Individuals or businesses purchasing six or more dwellings will continue to qualify for the non-residential rates of SDLT. Clause 8 makes changes to ensure that first-time buyers’ relief from stamp duty land tax can be accessed by those purchasing new residential leases through a nominee or bare trustee, including victims of domestic abuse. A nominee is a person who holds the legal title of a property, while the beneficial ownership—the person who ultimately owns or controls the assets—is held by another person. A bare trust is a trust under which property is held by a person as trustee for another person who is fully entitled to all of the capital and income of the trust.”
“His Majesty’s Revenue and Customs has seen a high number of incorrect and abusive claims for the relief. Those have been driven by tax repayment agents, who often convince private individuals to make relief claims for the purchase of two dwellings when individuals have in fact only purchased one. One such example is somebody buying a large house with a separate indoor entertainment area, including a swimming pool and toilet, and that being counted as two properties when it is transparently one. The changes made by clause 7 will abolish multiple dwellings relief for property transactions that complete on or after 1 June 2024. However, for contracts that were exchanged on or before 6 March 2024, relief will continue to apply regardless of when the contracts complete. The change will not impact those purchasing a single property.”
“There will be no change to the lower rate of 18% for private residence relief. Clause 7 concerns multiple dwellings relief, or MDR, which is a bulk purchase relief in the stamp duty land tax regime. The clause abolishes multiple dwellings relief from 1 June 2024. Multiple dwellings relief allows anyone purchasing two or more dwellings in a single transaction or in linked transactions to calculate their stamp duty based on the average value of the properties purchased, as opposed to their aggregate value. Multiple dwellings relief was introduced in 2011 with the intention of promoting investment in the private rented sector, but a recent external evaluation found no strong evidence that it has done so, meaning that the relief is not cost-effective and is therefore not acting as intended.”
“Where a disposal is liable to CGT, gains are taxed at a lower rate of 18% for any gains that fall within an individual’s basic rate band and at a higher rate for any gains above that. The 28% higher rate was deterring some sales of residential properties, so the Government announced a 4 percentage point cut to the higher rate at spring Budget 2024. That will encourage more landlords and second home owners to sell their residential properties, making more homes available to the market for a variety of purchasers, including first-time buyers. The OBR forecasts that there will be around 60,000 more residential property transactions over the next five years owing to the cut. As more homes are bought and sold, the Exchequer is expected to raise an additional £690 million in revenue over that period.”
“Clauses 6 to 11 are related to the property tax measures in the Bill. I hope that Members will forgive me, but this is a slightly longer speech, as I will talk through each clause. Indeed, it is the longest speech that I plan on giving today, although it is not too long—please do not have a heart attack; I will not be reading every one of these pieces of paper. Clause 6 cuts the higher rate of capital gains tax, or CGT, charged on residential property gains from 28% to 24% from 6 April 2024. CGT is of course charged on the disposals of buy-to-lets and second homes. Main homes are exempt through private residence relief, which means for that the majority of residential property sales no CGT is paid at all.”
“Clauses 7 to 11 ordered to stand part of the Bill. Clause 14 Additional relief for low-budget films with specified UK connection Question proposed, That the clause stand part of the Bill.”
“The Government are continuing to engage with stakeholders in the build-to-rent sector and other sectors to ensure that we understand their concerns and we will continue to listen to representations made to highlight any exception or unforeseen impacts that the abolition of MDR could have in the future. I welcome the hon. Gentleman’s welcoming of many of the other measures. He asked whether they would be applied before the April deadline. They will not be applied retrospectively—for example, the updates on the registered social landlord exemption will not be applied retrospectively. The hon. Gentleman mentioned the number of public bodies that have paid stamp duty at the 15% higher rate. The number of transactions—of those impacted previously —has been very small, and we therefore do not anticipate a huge impact.”
“Gentleman raised about MDR and other measures, it is interesting that although there are examples of abuse, it is also the case that only 32% of businesses buying property to let said that this relief had an important influence on their purchase decision at all and only 45% were aware of multiple dwellings relief before making a purchase decision. That feeds into the overall picture of MDR not fulfilling the original intent and purpose, which of course was to support investment in the private rented sector. Again, it is building the picture that the relief is no longer cost-effective.”
“If I may respond briefly, I will answer the perfectly reasonable questions raised by the hon. Member for Ealing North in relation to several points in multiple areas. Regarding the overall impact, and if I may reference the change of the capital gains tax rate from 28% to 24%, the OBR estimates that this costing will have a positive impact beyond the current forecasting period and generate a small long-term yield, too. Of course, beyond the forecasting period, it is difficult to estimate the exact amount. On the points that the hon.”
“That translates into £31.80 back for every £100 spent, after accounting for corporation tax at 25%. Films will also need to meet the criteria of a new British Film Institute test, with the expectation that films will have either a UK writer, a UK director or be certified as an official co-production. Clauses 14 to 15 set out the bulk of the measure, but further detail, including on the additional test, will be provided in a statutory instrument in due course. Productions that start principal photography from 1 April 2024 will be eligible, and companies will be able to make claims from 1 April 2025 on expenditure incurred from 1 April 2024. The UK independent film tax credit is a transformational, generous, enhanced tax credit, which will boost the production of UK independent films and incubate UK film talent.”
“Clauses 14 and 15 make changes to better support the UK independent film industry. That is in recognition of the sector’s cultural importance and its role in growing and supporting UK talent. The Government have heard from several representatives of the British film industry, including the British Film Institute, about the specific challenges that the independent film industry faces. The Government also recognise the vital role that independent film plays in incubating UK talent. The changes made by clauses 14 and 15 substantially increase the level of audio-visual expenditure credit available to smaller budget films from 34% to 53%. This increased rate for qualifying films is referred to as the UK independent film tax credit. The 53% tax credit will be applied on up to 80% of a film’s production costs, up to a cap of about £15 million.”
“Gentleman to be a little patient and wait for the details in the statutory instrument, but we are consulting key stakeholders on that. Question put and agreed to. Clause 14 accordingly ordered to stand part of the Bill. Clause 15 ordered to stand part of the Bill. Clause 16 Increase in theatre tax credit Question proposed, That the clause stand part of the Bill.”
“I thank the Opposition for their support. I think there is agreement across the House on the vital role of the world-leading UK creative industries, and, in particular, our thriving film sector. In answer to the broad question put by the hon. Member for Ealing North, further information will provided by a statutory instrument that we will discuss in due course. His Majesty’s Revenue and Customs will have a role in that, and the precise resource allocation is an operational decision for it. As the Minister who oversees HMRC, I will pay close attention to the issue and I will ensure that it is properly resourced. This is a very important policy area and we want to ensure that it is successful. Again, I am afraid that I will ask the hon.”
“Clause 18 removes the expiry date of the museums and galleries exhibition tax relief so that the relief similarly becomes permanent rather than ending on 1 April 2026. The changes will benefit approximately 1,300 theatre companies, orchestra companies and museums and galleries that claim those tax reliefs on an annual basis. Our creative sector is vitally important to our national life and one of the fastest growing sectors in the UK economy. These clauses will bolster our theatres, orchestras and museums and galleries, ensuring that they remain among the best in the world. I commend the clauses to the Committee.”
“The orchestra, theatre, and museums and galleries exhibition tax reliefs have had rates of 45% for non-touring productions and 50% for touring productions and orchestral productions since October 2021, reflecting the unique challenges faced by those sectors during the covid-19 pandemic and the recovery period, which of course we are still in. The rates were due to be reduced to 30% and 35% on 1 April 2025 and then return to their original levels of 20% and 25% on 1 April 2026. Clauses 16 and 17 change that so the tax reliefs will reduce to only 40% for non-touring productions and 45% for touring productions and orchestral productions on 1 April 2025, and will then remain at that level permanently. That was a key ask of the sector.”
“We are powering through this— I have on my notes “tea break” by now, but it is not going to happen. That is no bad thing, and I appreciate the comments and input from hon. Members. I will repeat my thanks as well—a lot of work has gone into the measures that we are discussing today and many stakeholders have already contributed significant amounts, including through consultations. One such area is what we are debating now: clauses 16 to 18 make changes to ensure that our world-leading theatres, orchestras and museums and galleries may continue to put on outstanding home-grown productions and attract inward investment.”
“I do not have much more to add, other than to point out the strength of our creative industries in all four nations of the United Kingdom, which I am glad has been recognised across the Committee today. It is an incredible strength, and I am therefore pleased to hear today the very obvious cross-party agreement on continuing support for this vital sector. Question put and agreed to. Clause 16 accordingly ordered to stand part of the Bill. Clauses 17 and 18 ordered to stand part of the Bill. Clause 20 Collective investment schemes: co-ownership schemes Question proposed , That the clause stand part of the Bill.”
“This clause prevents tax avoidance by ensuring that individuals cannot bypass anti-avoidance legislation by using a company to transfer assets abroad while still benefiting from the income they generate. I therefore commend the clause to the Committee.”
“The changes will have an impact on transactions only where the purpose of the transfer is to avoid tax and will not have an impact on transfers that are genuine commercial transactions. The changes will apply to income that arises after 6 April 2024, regardless of when the transfer took place. In situations where multiple shareholders are involved in the transfer of an asset, any resulting tax charge will be apportioned between those individuals in proportion to their respective shareholdings. Further details will be provided in HMRC guidance. The measure is expected to affect a small number of individuals a year and will raise about £15 million in tax revenue over the forecast period. This change was anticipated by external groups and demonstrates that the Government are quick to crack down on tax avoidance loopholes.”
“However, the Supreme Court decision means that a shareholder cannot be determined as a transferor, which therefore opens up a loophole that can be exploited by shareholders transferring assets abroad via a close company to avoid UK tax. A close company is a company with five or fewer participators, usually shareholders or directors, who have ownership or control over the business. The changes made by the clause will introduce a provision that deems an individual as the transferor where they are participators in a close company that transfers an asset to a person abroad in order to avoid UK tax. The amendment also applies to transfers by non-resident companies that would be treated as a close company if they were UK resident.”
“Clause 22 makes changes to ensure that individuals cannot use a company as a device to bypass anti-avoidance legislation, known as the transfer of assets abroad provisions. Those provisions are designed to prevent individuals from transferring ownership of income-generating assets, such as real estate or stocks, to an overseas individual or entity while still benefiting from the income that the assets generate. The provisions prevent the moving of assets into offshore structures outside the scope of UK taxation being a simple tax avoidance route for UK residents. The clause has been introduced following a Supreme Court decision. Prior to the decision, HMRC considered that shareholders and directors who controlled a company could transfer an asset and were therefore in scope of the transfer of assets abroad provisions.”
“Member for Hampstead and Kilburn some assurance. We appreciate the concerns that have raised by key stakeholders, and further information and guidance will be forthcoming. Question put and agreed to. Clause 22 accordingly ordered to stand part of the Bill. Clause 23 Minor VAT amendments Question proposed, That the clause stand part of the Bill.”
“The purpose behind the legislation is primarily to ensure that the regime acts as intended. I will not go into the weeds on HMRC’s determination process—further guidance will be given—but HMRC will review the facts of a case to judge whether someone is directly or indirectly involved in the decision making of a company. It will accept evidence that shows whether someone is involved or not. However, any arrangements that are put in place purely to be used as evidence that an individual is not involved in the decision making of a company will be disregarded and a charge will be levied if the other conditions are met. As I said, HMRC will issue guidance on how it will approach the matter in due course. Decisions will be made based on the facts of each individual case. I hope that I have given the hon.”
“It is also important to remember that the legislation does not bring a tax charge when the transfer is for genuine commercial reasons or when tax avoidance was not the purpose of the transfer. The new legislation gives individuals the opportunity to exclude themselves from the tax charge if certain conditions are met. We respectfully disagree with the CIOT on some of those conditions. We have outlined some of those, and HMRC will produce further guidance in due course. On the retroactive criticism, the clause has retroactive effect because if it did not, it would have allowed individuals to abuse the loophole between the date of the Fisher judgment and the enactment of the legislation. Again, we do not believe that there will be a significant increase in complexity.”
“It would be easy for an individual to sidestep the legislation by transferring such an asset to a company that they controlled before the company then made the transfer abroad. The legislative changes are aimed at preventing that situation and ensuring that the TOAA rules are applied as intended. On the point about the legislation being broad, let us not forget that it is being brought in in response to the Supreme Court judgment; we are trying to make sure that it acts as intended throughout. The intention of the legislation is to put the situation involving transfers by companies back to how HMRC considered it operated before the Supreme Court decision. The transfer of assets abroad legislation aims to stop that tax avoidance.”
“I thank the hon. Member for Hampstead and Kilburn for her comments. We very much appreciate the input that we have received from stakeholders and interested parties, including the Chartered Institute of Taxation. Some of those points are about broader issues around the TOAA regime, rather than specific to this legislation, but we do hear what they have to say. I will respond to the hon. Lady’s points about the changes that apply to companies when the TOAA regime is primarily about individuals. The transfer of assets abroad legislation is an anti-avoidance provision aimed at preventing individuals from avoiding a tax charge by transferring an asset to a person overseas while still being able to enjoy the income of that asset in some way.”
“To ensure that all VAT-registered businesses are treated equally, the changes will be given backdated effect to 1 January 2023, when the interest rules were introduced for VAT. Clause 23 makes some small changes to ensure that policy works as intended and to further Government commitments on reforming the VAT terminal markets order. I commend it to the Committee.”
“The IT system can already operate, but the legislation, mistakenly, does not always allow that automated recovery. The change will ensure that HMRC can do so in all cases instead of needing a different, onerous process for a minority of cases that the original legislation did not cover. The second change will make sure that VAT-registered businesses are always protected by a provision that creates a fairer basis for the calculation of interest where they owed money to HMRC over the same time that HMRC owed money to them. The original legislation failed to extend that safeguard to all scenarios in which that could happen with VAT, undermining the fairness of the interest regime.”
“Changes made by the Finance Act 2021 brought VAT interest in line with taxes such as income tax from 1 January last year. In implementing the new interest rules for VAT, HMRC has discovered some minor defects in the legislation, which without correction would force it to act in a way that conflicts with policy intent. Clause 23 will therefore make two changes to the interest rules. The first will address the situation in which interest ought to be repaid to HMRC because, following an assessment or amendment that reduces the amount of VAT credit, the repayment interest due is also reduced. It was always intended that HMRC could recover all these amounts through a simple automated process that does not add to burdens for taxpayers and HMRC alike.”
“The Government previously announced their intention to reform the order to reflect current market practices and to keep pace with market changes, such as trades in new products, including carbon credits. This clause takes that commitment forward. Finally, subsections (4) and (5) make changes to ensure that VAT interest rules operate as intended. For most major taxes, the Finance Act 2009 requires HMRC to pay interest on amounts due from HMRC to taxpayers, and to charge interest on late payments to HMRC. Historically, that regime did not apply to VAT, which had its own interest rules. Harmonising the rules on interest was an important step in delivering the Government’s ambition to build a trusted, modern tax administration system.”
“Under the new process, only essential details are required on the claim form, eliminating the need for claimants to submit certain evidential documents up front. Based on the information provided on the claim form, HMRC can then request evidential documents to verify the claim. Clause 23(1) will give HMRC a clear power under the DIY house builders’ scheme to require further evidential documentation, such as invoices, from the person who submitted a claim under the scheme. That will assist HMRC in verifying claims. Clause 23(3) is a minor update to the existing powers that allow for reform of the VAT terminal markets order. The order reduces VAT administration burdens on commodities traded on specified markets, so the power will allow for simplifications to support businesses trading those commodities.”
“Clause 23 makes some minor, technical changes to VAT legislation relating to the DIY house builders’ scheme and VAT credit in the penalty reform regime, and allows for reform of the VAT terminal markets order. I will speak briefly about each measure in turn. The DIY house builders’ scheme allows individuals building their own home, or converting a non-residential building to their own home, to recover VAT incurred on the cost. That puts individual house builders in the same position as property developers, who are able to sell new build residential property at a zero rate and recover the VAT they incur in the process of constructing new build properties. The scheme was simplified and made digital in December last year, which has significantly reduced the time taken for claims to be paid.”
“The hon. Member for Inverness, Nairn, Badenoch and Strathspey has been charming until this point, and now he goes back to this. I know him very well; I am sure he does not mean it. First, he knows as well as anybody in this House that everybody who comes into Parliament cares: they care about their constituents and they care about the country. We are motivated to come here because we want to make the country a better place for our children and grandchildren. I know that the hon. Gentleman occasionally gets rather vocal on some of these points, but I politely request that he be a little bit careful with some of his comments. I would never criticise the motivation, incentives or purposes of any colleague in this place. I may fundamentally disagree with some of their policies, but I will not disagree with their motivations.”
“We have spoken about that many times, and I know that it is particularly important to Scotland, where it is a disproportionately larger share of the economy than in England, for example, although it is important and large across every single constituency in the UK—and I do mean every single constituency. But the hon. Gentleman is being a little bit rich, because he knows as well as I do that there are other measures beyond VAT to support the hospitality and leisure industry. Of course, in England we have extended the 75% business rates reduction to the retail, hospitality and leisure sector, but that has not been done in Scotland, nor has it been done to its full extent in Wales.”
“Yet again, I appreciate the hon. Gentleman’s trying to clarify, but I am a member of the Government and therefore I am afraid that I do take offence, direct or indirect. But that is a side point to the matters under discussion. The hon. Gentleman is making fair and valid points about the support that has been given, but I repeat that this Government, like every Government around the world, have had incredibly difficult circumstances to deal with. I do not think that there is any doubt whatever that the support measures that we have put in place to support lives and livelihoods have been incredible and stack up pretty well when compared internationally. That includes cost of living support, as I have mentioned. I know that the hon. Gentleman is a huge supporter of the tourism, hospitality and leisure industry.”
“Question put and agreed to. Clause 23 accordingly ordered to stand part of the Bill. Clause 24 Collective money purchase arrangements Question proposed, That the clause stand part of the Bill.”
“I acknowledge the efforts made by the Scottish Government to support various sectors, but as I say, on that particular item, the hon. Gentleman will know as well as I do that it is a key ask of the industry in Scotland for the Scottish Government to follow suit with England and elsewhere. The hon. Member for Hampstead and Kilburn raised several points. Some were slightly out of the scope of the specific measures under discussion, including IT systems and other considerations, but I take on board what she says, as does HMRC, because there is a constant need to review and assess the scope of IT systems and so on. We do so on a regular basis; I spend a lot of time talking to HMRC about this, so I can assure the hon. Lady that the points that she raised are constantly under consideration. I will probably leave it at that.”
“This measure authorises the transfer of survivor benefits in collective money purchase pension schemes. This will ensure that Royal Mail Group, the first provider of a collective money purchase pension scheme, can launch its scheme as planned. It is a complicated title, but with a simple purpose. As a result of these changes, an employee of Royal Mail will be able to sign on to a CMP, with all the benefits, without the risk of transferring survivor benefits being put through as unauthorised transactions. I therefore commend the clause to the Committee.”
“Clause 24 makes further provision for collective money purchase arrangements. CMP arrangements are a new type of pension that have the benefit of pooling individuals’ pension pots to provide better incomes in retirement while limiting the liability of employers. These changes will enable the Government to authorise the transfer of benefits to a member’s beneficiaries, such as their dependants, in the unlikely event that a member dies while a CMP arrangement is being wound up. That will ensure that such transfers do not incur an unauthorised payment charge of 55%, and it will deliver the Government’s commitment to provide the correct tax outcome for CMP arrangements. The Pension Schemes Act 2021 introduced legislation to allow collective money purchase schemes to operate in the United Kingdom.”
“I will be very brief, because the clause is fairly straightforward. It provides for the use of abbreviations for a variety of Acts. For example, it provides for the use of “CTA 2009” as an abbreviation for the Corporation Tax Act 2009. I commend the clause to the Committee. Question put and agreed to. Clause 2 5 accordingly ordered to stand part of the Bill. Clause 26 Short title Question proposed, That the clause stand part of the Bill.”
“The clause provides for the Bill to be known as the Finance (No. 2) Act 2024 upon Royal Assent. I commend it to the Committee. Question put and agreed to. Clause 2 6 accordingly ordered to stand part of the Bill. Question proposed, That the Chair do report the Bill to the House.”
“We have moved forward very quickly today. I thank everybody for their participation: you, Mrs Latham, all the officials in the House, the Clerks, and all those who have been working on the Bill at HMRC, HMT and other Government Departments. I repeat my thanks to the external stakeholders for their comments and to all those who have been involved in consultations. In particular, I thank the Chartered Institute of Taxation, the Institute of Chartered Accountants in England and Wales, and the Low Incomes Tax Reform Group for their contributions to this Committee, including in written form, and all those who have participated today. I look forward to the Bill progressing smoothly through its final stages. I thank everybody involved.”
“Clause 3 sets the default income tax rates at the same levels as the main rates—namely 20%, 40% and 45%—across the entire UK. These rates apply to the non-savings and non-dividend income of taxpayers who are not subject to the main rates of income tax or to Welsh or Scottish rates of income tax, such as non-UK resident individuals. The clause also sets the savings rates of income tax for all UK taxpayers, again at 20%, 40% and 45%. As I mentioned, income tax is a vital revenue stream for our public services, without which we could not fund our schools, hospitals, defence and more. It is important that we keep it at its current level.”
“Clause 2 sets the main income tax rates—namely the basic rate of 20%, the higher rate of 40% and the additional rate of 45%—for non-savings and non-dividend income of taxpayers in England and Northern Ireland. Those rates are set separately from those in clause 3, as the income tax rates for non-savings and non-dividend income, such as earnings from employment, are devolved to the Scottish and Welsh Governments, and are set by their respective Parliaments. The decision to separate savings and dividends from other forms of income was made as part of the devolution settlement. It ensures that the UK system works effectively and coherently, recognising that dividend and savings income is generally more mobile and generated across the UK, and has some interactions with corporation tax, which is not devolved.”
“All workers can now earn £1,000 a month before paying any tax, due to the significant increases to the national insurance starting threshold, which we changed in July 2022. Let me turn to the first four clauses of the Bill. Income tax is the largest source of Government revenue and helps to fund the UK’s schools, hospitals and defence, and other essential services we all rely on. In 2024-25, it is expected to raise more than £302 billion. Each year, the Government must legislate to charge and set rates of income tax, which is why we are all here today. Clauses 1 to 3 impose an income tax charge and set the rates of it for 2024-25. The rates are not changed by the Bill; rather, we are confirming that they will remain the same. Clause 1 imposes a charge on individuals to pay income tax for the year 2024-25.”
“It is an honour to open the debate. I will start by setting out how, because of the progress the Government have made, we have been able to cut taxes as part of our plan to reward work and grow the economy. The Government cut national insurance at both the autumn statement and the spring Budget and have made above-inflation increases to thresholds since 2010, with the basic rate threshold rising from £6,475 to £12,570 today. Taken together, those measures mean that an average worker on £35,400 in 2024-25 will save £1,500 more in personal taxes than they otherwise would have done. Due to the significant real-terms increases to the personal allowance, it is estimated that 1.8 million people will be taken out of income tax altogether by 2024-25, compared with the threshold rising in line with inflation from 2010-11.”