Finance Act 2026

(4) To the extent that the value transferred by a transfer of value made on the death of a member of a pension scheme is attributable to the member’s notional pension property— (a) the value transferred is treated for the purposes of this section as also attributable to any land in the United Kingdom that on the death of the member is given under the scheme to a body falling within subsection (2), and (b) section 23(2) does not (despite subsection (3)) apply in relation to subsection (1).

• (7) In section 25 (gifts for national purposes etc), after subsection (3) insert—

(4) To the extent that the value transferred by a transfer of value made on the death of a member of a pension scheme is attributable to the member’s notional pension property— (a) the value transferred is treated for the purposes of this section as also attributable to any property that on the death of the member is given under the scheme— (i) to a body within Schedule 3, or (ii) in the circumstances described in paragraph 1 of Schedule 14 to the Finance Act 2012 (gifts to nation), and (b) section 23(2) does not (despite subsection (2)) apply in relation to subsection (1).

• (8) In section 27 (maintenance funds for historic buildings etc), after subsection (2) insert—

(3) To the extent that the value transferred by a transfer of value made on the death of a member of a pension scheme is attributable to the member’s notional pension property— (a) the value transferred is treated for the purposes of this section as also attributable to any property— (i) that on the death of the member is given under the scheme to a person and becomes comprised in a settlement, and (ii) in respect of which the condition in subsection (1)(a) or (b) is met, and (b) section 23(2) does not (despite subsection (2)) apply in relation to subsection (1).

• (9) In section 151 (treatment of pension rights etc)—

• (a) for the heading substitute “Other provision about pension interests”;

• (b) for subsections (2) and (3) substitute—

(3) Sections 49 to 53 (holder of interest in possession treated as directly entitled to property in which interest subsists etc) do not apply in relation to an interest in possession in property where the property is held for the purposes of a registered pension scheme, a qualifying non-UK pension scheme or a section 615(3) scheme.

• (c) omit subsection (4).

• (10) Omit section 152 (cash options).

• (11) After section 218A insert—

(218B) (1) The powers conferred on the Board by section 251 of the Finance Act 2004 (powers relating to the provision and preservation of information in connection with pensions) are exercisable for the purposes of this Act. (2) Subsection (1) is without prejudice to the generality of that section of that Act.

• (12) In section 272 (general interpretation), in subsection (1)—

• (a) in the definition of “member”, after “scheme,” insert “a qualifying non-UK pension scheme or a section 615(3) scheme,”;

• (b) at the appropriate places insert—

• “excluded benefit”, in relation to a pension scheme, has the meaning given by section 150A(6);

• “exempt benefit”, in relation to a pension scheme and a deceased member of the scheme, has the meaning given by section 210(7);

• “notional pension property”, in relation to a member of a pension scheme and a pension scheme, means property to which the member is treated under section 150A(1) (certain pension property treated as part of estate) as having been beneficially entitled immediately before their death by reference to the arrangements under the scheme;

• “qualifying non-UK pension scheme” has the meaning given in section 271A;

• “the scheme administrator”, in relation to a registered pension scheme, has the meaning given in section 270 of the Finance Act 2004;

Connected amendments to income tax rules

70

• (1) ITEPA 2003 is amended in accordance with subsections (2) to (6).

• (2) In section 567 (amount charged to tax), in subsection (5), at the appropriate place insert—

• section 567B (deduction where inheritance tax is paid in respect of pension death benefit);

• (3) After section 567A insert—

(567B) (1) This section applies if— (a) there is an amount of taxable pension income (“amount TPI”) for a tax year for a pension, annuity or other item of pension income, (b) amount TPI reflects (to any extent) the payment to a person (“the beneficiary”) of a benefit under a pension scheme on the death of a member of the scheme (“the deceased”), (c) the benefit is not an excluded benefit, and (d) at any time (whether before or after the benefit is paid)— (i) the beneficiary pays an amount of inheritance tax that is attributable to the value of the deceased’s notional pension property, (ii) the deceased’s personal representatives pay an amount of inheritance tax that is so attributable and pass on the burden of that payment to the beneficiary, or (iii) the scheme administrator pays (under section 226B of IHTA 1984) an amount of inheritance tax that is so attributable, and the payment meets the condition in subsection (2). (2) A payment of an amount of inheritance tax meets the condition in this subsection if (and so far as)— (a) in consequence of the payment, the scheme administrator makes an adjustment (under section 226B(5) of IHTA 1984) as a result of which the beneficiary’s entitlement to a benefit other than that mentioned in subsection (1) (“the other benefit”) is reduced, and (b) disregarding that reduction, the other benefit would not give rise to taxable pension income for any tax year. (3) A deduction is allowed from amount TPI equal to the lesser of— (a) the amount of inheritance tax paid as mentioned in subsection (1)(d)(i) or (ii), less so much (if any) of that inheritance tax as has been deducted under this subsection in an earlier tax year, and (b) so much of amount TPI as reflects the payment to the beneficiary of the benefit mentioned in subsection (1). (4) Where the deceased was under 75 on death, and the benefit mentioned in subsection (1) is a relevant lump sum death benefit, a deduction is allowed from amount TPI equal to the lesser of— (a) the amount of inheritance tax paid as mentioned in subsection (1)(d)(iii) so far as it meets the condition in subsection (2), less so much (if any) of that inheritance tax as has been deducted under this subsection in an earlier tax year, and (b) so much of amount TPI as reflects the payment to the beneficiary of the benefit mentioned in subsection (1). (5) Where a deduction is allowed under both of subsections (3) and (4), the deduction under subsection (4) is to be made first. (6) For the purposes of subsection (1)(d) the deceased’s personal representatives “pass on the burden” of a payment of inheritance tax to the beneficiary if— (a) the personal representatives pay a sum to the beneficiary out of the deceased’s estate that has been reduced by the amount of inheritance tax, or (b) the beneficiary reimburses the personal representatives that amount. (7) In this section— - “IHTA 1984” means the Inheritance Tax Act 1984; - “inheritance tax” includes interest on inheritance tax; - “excluded benefit” has the same meaning as in IHTA 1984; - “notional pension property” has the same meaning as in IHTA 1984; - “relevant lump sum death benefit” has the same meaning as in section 637S.

• (4) After section 579CA insert—

(579CB) (1) This section applies if— (a) an amount of inheritance tax that is attributable to the value of notional pension property of a deceased member of a registered pension scheme is paid, (b) some or all of the inheritance tax paid— (i) is repaid under section 241(1) of that Act to a person, other than a non-qualifying person, who is entitled to receive benefits under the scheme on the deceased’s death (a “beneficiary”), or (ii) is repaid under that section to the deceased’s personal representatives and passed on by the personal representatives to a beneficiary, (c) in a case in which the payment of inheritance tax mentioned in paragraph (a) was made by the beneficiary or by the deceased’s personal representatives, a deduction is allowed under section 567B in respect of the payment, and (d) the deceased was aged 75 or over at the date of their death. (2) The relevant amount is treated for the purposes of this Part as though it were a pension paid under the registered pension scheme (and is treated as accruing in the tax year in which it is paid). (3) In subsection (2) “the relevant amount” means— (a) in a case in which the payment of inheritance tax mentioned in subsection (1)(a) is made by the scheme administrator, the amount of the payment made to the beneficiary mentioned in subsection (1)(b)(i) or (ii); (b) in a case in which the payment of inheritance tax mentioned in subsection (1)(a) is made by a beneficiary or by the deceased’s personal representatives, the lesser of— (i) the amount of the payment made to the beneficiary mentioned in subsection (1)(b)(i) or (ii), and (ii) the deduction allowed under section 567B in respect of the payment of inheritance tax mentioned in subsection (1)(a). (4) In this section— - “inheritance tax” includes interest on inheritance tax; - “non-qualifying person” has the same meaning as in section 206 of FA 2004 (special lump sum death benefit charge).

• (5) In section 637T (availability of individual’s lump sum and death benefit allowance where multiple lump sum death benefits paid), after subsection (4) insert—

(5) Where any inheritance tax is attributable to the value of the individual’s notional pension property, references in subsection (4) to the amount of a lump sum death benefit are to its IHT-adjusted amount. (6) The “IHT-adjusted amount” of a lump sum death benefit paid to a person under a registered pension scheme is (subject to subsection (7)) the amount determined as follows — - Step 1Take the amount of the lump sum death benefit paid to the person. - Step 2Add the amount (if any) by which the person’s entitlement to the lump sum death benefit was reduced in consequence of an adjustment under section 226B(5) of IHTA 1984. - Step 3Deduct the amount (if any) of inheritance tax—that is attributable to the value of the individual’s notional pension property in relation to the scheme, andfor which the person—is, or at any time was, liable under section 200(1)(c) of IHTA 1984, orwould at any time have been liable under that provision if the tax had not previously been paid by another person.If the result is a negative amount, the IHT-adjusted amount of the lump sum death benefit is nil. (7) Where more than one lump sum death benefit is paid to the person under the scheme, the amount to be deducted under Step 3 is the following proportion of the amount of inheritance tax identified in that Step— $$C/D$where—“C” is the amount resulting from Step 2;“D” is the aggregate of the amounts resulting from Step 2 in respect of each lump sum death benefit paid to the person under the scheme.$ (8) In this section— (a) “IHTA 1984” means the Inheritance Tax Act 1984; (b) “notional pension property” has the same meaning as in IHTA 1984.

• (6) In section 683 (PAYE income), in subsection (3B), at the end insert “or section 579CB (inheritance tax overpaid by scheme administrator: refund treated as pension)”.

• (7) FA 2004 is amended in accordance with subsections (8) to (10).

• (8) In section 164 (authorised member payments), in subsection (1), after paragraph (e) (but before the “and” that follows it) insert—

(ea) payments of inheritance tax under section 226B of the Inheritance Tax Act 1984 (direct payment of tax by scheme administrator),

• (9) After section 206 insert—

(206A) (1) This section applies where— (a) a registered pension scheme pays a lump sum death benefit in respect of a deceased member to a non-qualifying person, (b) a liability to the lump sum death benefits charge arises in respect of the lump sum death benefit, (c) at any time (whether before or after the payment of the lump sum death benefit)— (i) the non-qualifying person pays an amount of inheritance tax that is attributable to the value of the deceased’s notional pension property, or (ii) the deceased’s personal representatives pay an amount of inheritance tax that is so attributable and pass on the burden of that payment to the non-qualifying person, and (d) the non-qualifying person makes an application under this section for a reduction in the lump sum death benefits charge. (2) Section 206 applies in relation to the lump sum death benefit as if the amount of the benefit that was paid to the non-qualifying person were the amount in fact paid, reduced by the amount of inheritance tax paid as mentioned in subsection (1)(c). (3) If and to the extent that the amount of the lump sum death benefits charge paid in respect of the lump sum death benefit exceeds the amount of the liability (as recalculated as a result of subsection (2)), the excess must be repaid to the non-qualifying person (and may not be repaid to the scheme administrator). (4) An application under this section is of no effect unless it complies with such requirements as to timing, form and content as may be prescribed by the Commissioners. (5) For the purposes of subsection (1)(c) the deceased’s personal representatives “pass on the burden” of a payment of inheritance tax to the non-qualifying person if— (a) the personal representatives pay a sum to the non-qualifying person out of the deceased’s estate that has been reduced by the amount of inheritance tax, or (b) the non-qualifying person reimburses the personal representatives that amount. (6) In this section— - “the Commissioners” means the Commissioners for His Majesty’s Revenue and Customs; - “inheritance tax” includes interest on inheritance tax; - “non-qualifying person” has the same meaning as in section 206. (206B) (1) This section applies where— (a) a registered pension scheme pays a lump sum death benefit in respect of a deceased member to a non-qualifying person, (b) a liability to the lump sum death benefits charge arises in respect of the lump sum death benefit, (c) an amount of inheritance tax that is attributable to the value of notional pension property of the deceased member is paid, (d) some or all of the inheritance tax paid as mentioned in paragraph (c) is subsequently— (i) repaid under section 241(1) of that Act to the non-qualifying person, or (ii) repaid under that section to the deceased’s personal representatives and passed on by the personal representatives to the non-qualifying person, and (e) in a case in which the payment mentioned in paragraph (c) was made by the non-qualifying person or by the deceased’s personal representatives, the non-qualifying person has made an application under section 206A in relation to the lump sum death benefit. (2) A charge to income tax arises in respect of the relevant amount. (3) In subsection (2) “the relevant amount” means— (a) in a case in which the payment of inheritance tax mentioned in subsection (1)(c) is made by the scheme administrator, the amount of the payment made to the non-qualifying person mentioned in subsection (1)(d)(i) or (ii); (b) in a case in which the payment of inheritance tax mentioned in subsection (1)(c) is made by the non-qualifying person, or by the deceased’s personal representatives, the lesser of— (i) the amount of the payment made to the non-qualifying person mentioned in subsection (1)(d)(i) or (ii), and (ii) the repayment made under section 206A to the non-qualifying person in relation to the lump sum death benefit. (4) The person liable to the charge is the non-qualifying person. (5) The rate of the charge is the same as the rate of the special lump sum death benefits charge (see section 206(4)). (6) In this section— - “inheritance tax” includes interest on inheritance tax; - “non-qualifying person” has the same meaning as in section 206.

• (10) In section 274A (power to split pension schemes), at the end insert—

(5) Sections 226A and 226B of the Inheritance Tax Act 1984 (withholding of benefits and payment of inheritance tax by scheme administrator) are treated for the purposes of this section as provision made by this Part.

Commencement of sections 66 to 70

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The amendments made by sections 66 to 70 apply in relation to deaths, and (so far as relevant) to other transfers of value within the meaning of IHTA 1984, occurring on or after 6 April 2027.

Freeze of nil rate band etc

Rate bands etc for tax year 2030-31

72

In section 86 of FA 2021 (no indexation of rate bands, residential enhancement and taper threshold for tax years up to 2029-30)—

• (a) for “or 2028” substitute “, 2028 or 2029”, and

• (b) in the heading, for “2029-30” substitute “2030-31”.

Provision relating to new regime in FA 2025

Relevant property: disapplication of exemptions from exit charges

73

• (1) In IHTA 1984, in section 65 (relevant property: exit charges), after subsection (8A) insert—

(8B) None of subsections (7), (7A) and (8) applies in relation to property comprised in a settlement if— (a) a long-term residence change took place at a time— (i) before the event in question, and (ii) if there have been one or more ten-year anniversaries before the event in question, after the most recent of them, (b) the long-term residence change did not result in tax being charged under this section by reference to the property, and (c) the long-term residence change would have resulted in tax being charged under this section by reference to the property if the property had been property situated outside the United Kingdom when the long-term residence change took place. (8C) In subsection (8B) “long-term residence change” means— (a) the settlor not being a long-term UK resident at the start of the tax year 2025-26, or (b) the settlor ceasing to be a long-term UK resident at the start of any later tax year.

• (2) The amendment made by subsection (1) is treated as having come into force on 26 November 2025.

Relevant property: cap on charges for pre-30 October 2024 excluded property

74

• (1) In IHTA 1984, after section 75A insert—

(75B) (1) This section applies if (ignoring this section) tax is charged under section 64 (ten-year anniversary charge) or 65 (exit charge) by reference to the value of property— (a) that became comprised in the settlement in question before 30 October 2024, (b) that immediately before 30 October 2024 was excluded property by virtue of section 48(3) or (3A) (as it had effect at that time), and (c) that immediately before the occasion of the charge— (i) is situated outside the United Kingdom and is not property to which paragraph 2 or 3 of Schedule A1 applies, or (ii) is a holding in an authorised unit trust or a share in an open-ended investment company. (2) The amount of tax charged by reference to the value of the property is, if it would otherwise be greater, to be reduced (but not below zero) to the difference between— (a) the applicable cap in relation to the relevant period in which the occasion of the charge falls, and (b) any amount of tax already charged under section 65 in relation to the settlement, earlier in that relevant period, by reference to the value of property meeting the conditions in subsection (1). (3) In this section— - “the applicable cap” means—in relation to the first relevant period, £125,000 multiplied by the number of whole successive quarters in the period;in relation to a subsequent relevant period, £5 million; - “relevant period” means—the period beginning with 6 April 2025 and ending with the first ten-year anniversary falling after that date, andeach subsequent period of ten years.

• (2) The amendment made by subsection (1) is treated as having come into force on 6 April 2025.

Foreign diplomats etc: periods of UK residence to be disregarded

75

• (1) In IHTA 1984, after section 155 insert—

(155ZA) (1) In determining whether a person is a long-term UK resident for the purposes of this Act, the person is treated (so far as would not otherwise be the case) as not having been resident in the United Kingdom for any tax year in which they were subject at any time to a relevant international exemption. (2) For that purpose a person is “subject to a relevant international exemption” at a given time if, were the person to die at that time, an exemption in respect of inheritance tax would apply in relation to any of the person’s property by virtue of any of the following— - the Diplomatic Privileges Act 1964 - the Consular Relations Act 1968 - the International Organisations Act 1968 - the European Communities Act 1972 - the International Criminal Court Act 2001.

• (2) The amendment made by subsection (1) is treated as having come into force on 6 April 2025 (and has effect in relation to tax years ending before that date as it has effect in relation to later tax years).

Minor corrections

76

• (1) IHTA 1984 is amended in accordance with subsections (2) and (3).

• (2) In section 267ZD (further provision about elections under section 267ZC), in subsection (8), for “a lifetime election” substitute “an election under section 267ZC”.

• (3) In section 157 (non-residents’ bank accounts), in subsection (3), in each of paragraphs (c) and (d), omit “not”.

• (4) The amendment made by subsection (2) is treated as having come into force on 6 April 2025.

• (5) The amendment made by subsection (3) is treated as having come into force on 26 November 2025.

• (6) Section 157(3) of IHTA 1984 is treated as having had effect for the period beginning with 6 April 2025 and ending with 26 November 2025 with the omission of its paragraphs (c) and (d) (and the insertion of “or” after paragraph (a)).

Infected blood compensation payments

Power to make provision about infected blood compensation payments

77

• (1) The Treasury may by regulations made by statutory instrument make provision conferring relief from inheritance tax in respect of infected blood compensation payments.

• (2) The provision that may be made under subsection (1) includes provision about the treatment of dispositions of amounts received by way of, or that are otherwise referable to, infected blood compensation payments.

• (3) Regulations under subsection (1) may—

• (a) amend or otherwise modify Schedule 15 to FA 2020 (tax relief for scheme payments etc);

• (b) include retrospective provision that does not increase any person’s liability to tax;

• (c) make different provision for different cases;

• (d) include consequential, transitional or saving provision.

• (4) In this section—

• “infected blood compensation payment” means a payment that—is made under an infected blood compensation scheme, andis a qualifying payment for the purposes of Schedule 15 to FA 2020 (tax relief for scheme payments etc) by virtue of regulations made under paragraph 2(5) of that Schedule;

• “infected blood compensation scheme” means—the infected blood compensation scheme established by virtue of section 49 of the Victims and Prisoners Act 2024, orthe scheme known as the Infected Blood Interim Compensation Payment Scheme (a non-statutory scheme established before that mentioned in paragraph (a)).

• (5) A statutory instrument containing regulations under subsection (1) that amend or otherwise modify Schedule 15 to FA 2020 may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.

• (6) A statutory instrument containing any other regulations under subsection (1) is subject to annulment in pursuance of a resolution of the House of Commons.

Gifts to charities and registered clubs

Scope of exemption for gifts to charities and registered clubs

78

• (1) IHTA 1984 is amended as follows.

• (2) In section 23 (gifts to charities or registered clubs), in subsection (6)—

• (a) in paragraph (a), omit “or is held on trust for charitable purposes only”;

• (b) in paragraph (b), omit “or is held on trust for purposes of registered clubs only”.

• (3) In section 29A (abatement of exemption where claim settled out of beneficiary’s own resources), in subsection (6), in paragraph (b) of the definition of “the exempt beneficiary”, omit sub-paragraph (ii) and the “or” before it.

• (4) In section 142 (alteration of dispositions taking effect on death)—

• (a) in subsection (3A), for “the appropriate person” substitute “the charity or registered club to which the property is given”;

• (b) omit subsection (3B).

• (5) The amendments made by this section have effect—

• (a) in relation to a transfer of value made on a person’s death, if the person dies on or after 6 April 2026;

• (b) in relation to a transfer of value made at any other time, if the transfer is made on or after 26 November 2025.

References in this subsection to the making of a transfer of value are to be construed in accordance with IHTA 1984.

Section 78: transitional protection for existing interests in possession

79

• (1) Subsection (2) applies in relation to a transfer of value (“the original transfer”) to the extent that the value transferred by it is attributable to property which meets each of the following conditions, namely—

• (a) that immediately before the original transfer a person was beneficially entitled to an interest in possession in the property to which section 49(1) of IHTA 1984 (interests treated as part of estate) applied;

• (b) that the person became beneficially entitled to the interest in possession before 26 November 2025;

• (c) that by virtue of the original transfer the property is held on trust—

• (i) only for charitable purposes, or

• (ii) only for purposes of registered clubs,

but is not given to charities or registered clubs;

• (d) that the property is given to charities or registered clubs within the period of 2 years beginning with the date of the original transfer (“the subsequent gift”).

• (2) For the purposes of IHTA 1984—

• (a) the original transfer is treated as attributable (and as always having been attributable) to property given to charities or registered clubs, and

• (b) the subsequent gift is disregarded.

• (3) Subsections (1) and (2) have effect—

• (a) where the original transfer is made on a person’s death, if the person dies on or after 6 April 2026;

• (b) where the original transfer is made at any other time, if the transfer is made on or after 26 November 2025.

• (4) Subsections (1) to (3)are to be construed as though they were contained in section 23 of IHTA 1984.

Part 3 — Other existing taxes

Value added tax and insurance premium tax

Zero-rating of leases of vehicles to recipients of disability benefits

80

• (1) VATA 1994 is amended as follows.

• (2) In Schedule 8, in Group 12 (drugs, medicines, aids for the disabled, etc), omit item 14.

• (3) In consequence of the amendment made by subsection (2), in that Group—

• (a) for item 15 substitute—

(15) (1) The sale of a motor vehicle that had been let on hire on relevant benefit terms, where such sale constitutes the first supply of the vehicle after the end of the period of such letting. (2) A vehicle has been let on hire on relevant benefit terms if— (a) the letting on hire was to a disabled person in receipt of— (i) a relevant disability benefit by virtue of entitlement to the mobility component of that benefit, (ii) an armed forces independence payment, or (iii) mobility supplement, (b) the letting was for a period of not less than 3 years, (c) the vehicle was unused at the commencement of the period of letting, and (d) the consideration for the letting consists wholly or partly of sums paid to the lessor by a relevant authority on behalf of the lessee in respect of— (i) the mobility component of a relevant disability benefit, (ii) armed forces independence payment, or (iii) mobility supplement. (3) For the purposes of paragraph (2)— - “relevant authority” means—the Department for Work and Pensions,the Ministry of Defence,the Scottish Ministers, orthe Department for Communities in Northern Ireland; - “relevant disability benefit” means—disability living allowance,personal independence payment,Child Disability Payment,Adult Disability Payment, orScottish Adult Disability Living Allowance.

• (b) omit note (6), and

• (c) in note (7)—

• (i) in the words before paragraph (a), for “14” substitute “15”,

• (ii) in paragraph (aa), for “the corresponding provision having effect in Northern Ireland” substitute “Part 5 of the Welfare Reform (Northern Ireland) Order 2015”,

• (iii) in paragraph (aaa), for “disability assistance for children and young people” substitute “Child Disability Payment”,

• (iv) in paragraph (aab), for “disability assistance for working age people” substitute “Adult Disability Payment”,

• (v) after that paragraph insert—

(aac) “Scottish Adult Disability Living Allowance” means a category of disability assistance for adults given in accordance with regulations made under section 31 of the Social Security (Scotland) Act 2018;

, and

• (vi) for paragraph (b) substitute—

(b) “mobility supplement” is a mobility supplement within the meaning of— (i) Article 20 of the Naval, Military and Air Forces Etc. (Disablement and Death) Service Pensions Order 2006, or (ii) Article 25A of the Personal Injuries (Civilians) Scheme 1983.

• (4) In Schedule 6 (valuation: special cases), after paragraph 11A insert—

(11B) (1) This paragraph applies for the purposes of determining the value of a supply consisting of the letting on hire of a motor vehicle on relevant benefit terms. (2) But this paragraph is to be ignored for the purposes of Schedule 1 (VAT registration). (3) “Relevant benefit terms” is to be construed in accordance with paragraph (2) of item 15 in Group 12 in Schedule 8 (zero-rating). (4) Any amount of consideration for the letting that falls within sub-paragraph (d) of that paragraph (payments of relevant benefits) is to be disregarded in determining the amount of the consideration for the purposes of calculating the value of the supply under this Act.

• (5) The amendments made by this section have effect in relation to leases of motor vehicles commencing on or after—

• (a) 1 July 2026, or

• (b) such later date as may be appointed in regulations made (before 1 July 2026) by statutory instrument by the Treasury.

Insurance premium tax relief limited to adapted vehicles

81

• (1) In Schedule 7A to FA 1994 (insurance premium tax: contracts that are not taxable), for paragraph 3 (and the italic heading before it) substitute—

(3) (1) A contract falls within this paragraph if it relates only to a motor vehicle and— (a) the vehicle is let on hire on relevant benefit terms to a person, and (b) the supply of the vehicle to that person is zero-rated for the purposes of the Value Added Tax Act 1994 as a result of it being a supply falling within— (i) paragraph (f) in item 2 in Group 12 in Schedule 8 to that Act, or (ii) item 2A in that Group. (2) “Relevant benefit terms” is to be construed in accordance with paragraph (2) of item 15 in Group 12 in Schedule 8 to the Value Added Tax Act 1994 (zero-rating).

• (2) The amendment made by this section has effect in relation to contracts relating to leases of motor vehicles where the lease commences on or after—

• (a) 1 July 2026, or

• (b) such later date as may be appointed in regulations made (before 1 July 2026) by statutory instrument by the Treasury.

Private hire vehicles or taxis

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• (1) In section 53 of VATA 1994 (tour operators), after subsection (3) insert—

(3A) But a person is not a tour operator if and so far as their business consists of making supplies of services consisting of the transport of passengers by private hire vehicle or taxi, unless those supplies are made in conjunction with, and are ancillary to, the making of supplies by the person consisting of— (a) the provision of accommodation, or (b) the transport of passengers by bus, coach, train, ship or aircraft.

• (2) The amendment made by subsection (1) has effect in relation to supplies made on or after 2 January 2026.

Certain charitable donations not to be treated as supplies of goods

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• (1) Schedule 4 to VATA 1994 (matters to be treated as supply of goods or services) is amended as follows.

• (2) In paragraph 5 (transfer of business goods treated as supply)—

• (a) in sub-paragraph (2), at the end insert—

(c) a qualifying charitable donation.

• (b) in sub-paragraph (2ZA), at the appropriate place insert—

• “qualifying charitable donation” has the meaning given in paragraph 5A;

• (3) After paragraph 5 insert—

(5A) (1) In paragraph 5 “qualifying charitable donation” means (subject to sub-paragraphs (6) and (7)) a donation of an item to a charity where— (a) the item’s value does not exceed the applicable limit, and (b) the donation is made— (i) for use by the charity otherwise than in the course or furtherance of a business, or (ii) for onward donation by the charity (whether or not to another charity). (2) In sub-paragraph (1)(a) “the applicable limit” means— (a) £200 where the item donated is any of the following— (i) a household appliance; (ii) furniture; (iii) flooring (including carpets and rugs); (iv) a computer; (v) a mobile phone; (vi) a tablet; (b) £100 in any other case. (3) For the purposes of sub-paragraph (1)(a) an item’s value is taken to be the lower of— (a) the cost to the donor of acquiring or, as the case may be, producing the item, and (b) such consideration in money as would be payable by the donor if the donor were, at the time of the donation, to purchase— (i) an item identical in every respect (including age and condition) to the item concerned, or (ii) where such consideration cannot be determined on the basis described in sub-paragraph (i), an item similar to and of the same age and condition as the item concerned; but where the amount described in paragraph (a) is not known, the item’s value is taken to be the amount described in paragraph (b). (4) Paragraph 5(2A) and (5A) (goods acquired by predecessor businesses) applies for the purposes of sub-paragraph (3). (5) For the purposes of sub-paragraph (3) the amount of consideration in money that would be payable by the donor if they were to purchase any goods is taken to be the amount that would be so payable by the donor after the deduction of any amount included in the purchase price in respect of VAT on the supply of the goods to the donor. (6) A donation is not a qualifying charitable donation if the item donated is any of the following— (a) a tobacco product within the meaning of the Tobacco Products Duty Act 1979; (b) a vaping product within the meaning of Part 4 of the Finance Act 2026; (c) an alcohol product within the meaning of Part 2 of the Finance (No.2) Act 2023, other than one belonging to a class or description on which alcohol duty is not charged under that Part of that Act. (7) A donation is not a qualifying charitable donation if (disregarding this paragraph) it is a zero-rated supply. (8) The Treasury may by order amend this paragraph for the purpose of varying the definition of “the applicable limit” in sub-paragraph (2).

• (4) The amendments made by subsections (1) to (3) have effect in relation to donations made on or after 1 April 2026.

Refunds of VAT to combined county authorities

84

• (1) In section 33 of VATA 1994 (refunds of VAT in certain cases), in subsection (3)(a) (which provides for the section to apply to local authorities and combined authorities), for the words from “and” to the end substitute “, a combined authority established by an order made under section 103(1) of the Local Democracy, Economic Development and Construction Act 2009 and a combined county authority established by regulations made under section 9(1) of the Levelling-up and Regeneration Act 2023;”.

• (2) The amendment made by this section has effect in relation to supplies made, and importations or acquisitions taking place, on or after 1 December 2025.

Stamp duty reserve tax

UK listing relief

85

• (1) After section 89B of FA 1986 (stamp duty reserve tax) insert—

(89C) (1) Section 87 does not apply as regards an agreement to transfer chargeable securities in a listed company— (a) that was first listed after the beginning of the period of 3 years ending with the relevant day, and (b) whose shares are admitted to trading on a UK regulated market, if none of the following exclusions apply. (2) Exclusion A (listed company mergers) applies if the listing referred to in subsection (1)(a) was connected to arrangements by which— (a) a listed company took control of another listed company, (b) a company took control of two or more listed companies, or (c) two or more listed companies merged all or substantially all of their businesses. (3) Exclusion B (new holding company) applies if— (a) the listing referred to in subsection (1)(a) was connected to arrangements by which the company took control of another company, and (b) immediately before those arrangements, the other company was— (i) listed other than by reference to depositary interests, and (ii) controlled by the person or persons who, at the time of the listing referred to in subsection (1)(a), controlled the company. (4) Exclusion C (change of control) applies if— (a) during the period beginning with the listing referred to in subsection (1)(a) and ending with the relevant day, there was a change of control in the company, or (b) the agreement to transfer forms part of arrangements changing control in the company. (5) In subsection (1)(a), the reference to a company being first listed is a reference to— (a) in the case of a company falling within subsection (6), the company first making a regulatory announcement to the effect that it has taken control of a company as described in subsection (6)(b), or (b) in other cases, shares in the company being admitted to the official list at a time when no other shares of the company were included in the official list. (6) A company falls within this subsection if— (a) shares in the company were admitted to the official list at a time when the company’s assets consisted wholly or mainly of cash or short-dated securities, and (b) the shares were admitted with a view to the company taking control of an unlisted company before the end of a certain period. (7) In this section— (a) a reference to a company being listed is a reference to shares in the company being included in the official list; (b) a reference to shares being included in the official list is a reference to shares— (i) being included in the official list in accordance with Part 6 of the Financial Services and Markets Act 2000 (“FSMA”) (see section 74 of that Act), or (ii) not being included only by reason of suspension under that Part; (c) a reference to shares being admitted to the official list has the same meaning as in that Part; (d) a reference to shares includes a reference to depositary interests in shares. (8) In this section— - “arrangements” includes any preliminary steps taken in connection with arrangements; - “control” has the meaning given in section 1124 of the Corporation Tax Act 2010; - “depositary interest” has the meaning given in regulations made under section 119 of the Finance Act 1999 (power to exempt UK depositary interests in foreign securities); - “regulatory announcement” means an announcement required by, and made in accordance with, Part 6 rules made under section 73A of FSMA; - “relevant day” has the meaning given in section 87(3); - “UK regulated market” has the same meaning as in Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (see Article 2(13A)).

• (2) The amendment made by subsection (1) has effect in relation to an agreement to transfer chargeable securities in a company that is first listed on or after 27 November 2025 (with “first listed” having the same meaning as in section 89C(1)(a) of FA 1986, as inserted by subsection (1)).

Gambling duties

Rate of remote gaming duty

86

• (1) In Chapter 3 of Part 3 of FA 2014 (remote gaming duty), in section 155(3) (which specifies the rate), for “21%” substitute “40%”.

• (2) The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2026.

• (3) In a case where an accounting period (a “straddling period”) begins before 1 April 2026 and ends on or after that date—

• (a) so much of the straddling period as falls before 1 April 2026, and

• (b) so much of it as falls on or after that date,

are to be treated as separate accounting periods for the purpose of calculating the duty concerned for the straddling period.

• (4) For the purposes of subsection (3), the amount on which duty is charged is apportioned to those separate accounting periods on a time basis according to the respective lengths of those periods.

General betting duty on remote bets

87

• (1) Chapter 1 of Part 3 of FA 2014 (general betting duty) is amended as follows.

• (2) In the cross-heading after section 125, after “General” insert “, remote”.

• (3) In section 126 (meaning of “general bet”), in subsection (1) after paragraph (a) insert—

(aa) it is not a remote bet,

• (4) After 127 (general bets) insert—

(127A) (1) General betting duty is charged on a remote bet made with a bookmaker. (2) It is charged at the rate of 25% of the bookmaker’s profits on remote bets for an accounting period. (3) The bookmaker’s profits on remote bets for an accounting period are the aggregate of— (a) the amount of the bookmaker’s ordinary profits for the period in respect of remote bets (calculated in accordance with section 131), and (b) the amount of the bookmaker’s retained winnings profits for the period in respect of remote bets (calculated in accordance with section 132). (4) Where the calculation for an accounting period under subsection (3) produces a negative amount— (a) the bookmaker’s profits on remote bets for the accounting period are treated as nil, and (b) the amount produced by the calculation may be carried forward in reduction of the bookmaker’s profits on remote bets for one or more later accounting periods. (5) A bet is a remote bet for the purposes of this Part if— (a) it is made using remote communication, (b) it is not an on-course bet, a spread bet or made by way of pool betting, (c) it is not made using a self-service betting terminal, and (d) condition B or C in section 126 is met in relation to it. (6) The reference here to “remote communication” is to communication using— (a) the internet, (b) telephone, (c) television, (d) radio, or (e) any other kind of electronic or other technology for facilitating communication. (7) A bet is to be treated as not being a remote bet for the purposes of this Part if it is made wholly in relation to horse racing taking place in the United Kingdom. (8) In this section, “self-service betting terminal” means a machine which— (a) is designed or adapted for use to bet on future real events, (b) is not a gaming machine (within the meaning of section 235 of the Gambling Act 2005), and (c) is located on premises in respect of which there is a betting premises licence (within the meaning of section 150(1)(e) of the Gambling Act 2005) or a bookmaking office licence (within the meaning of Article 2(2) of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (S.I. 1985/1204)). (9) The Treasury may by regulations amend subsection (6).

• (5) In section 190 of FA 2014 (index of defined expressions), in the Table, after the entry for “registrable person” insert—

remote bet	section 127A

• (6) In section 194(4) of FA 2014 (made affirmative procedure for regulations), before paragraph (za) insert—

(zza) regulations under section 127A(9) which have the effect of adding to the class of bets falling with the definition of “remote bet”;

• (7) This section has effect in relation to accounting periods beginning on or after 1 April 2027, and the charge under section 127A of FA 2014 is on bets made on or after that date.

• (8) In a case where an accounting period (a “straddling period”) begins before 1 April 2027 and ends on or after that date—

• (a) so much of the straddling period as falls before 1 April 2027, and

• (b) so much of it as falls on or after that date,

are to be treated as separate accounting periods for the purpose of calculating the duty concerned for the straddling period.

• (9) For the purposes of subsection (8), the amount on which duty is charged is apportioned to those separate accounting periods on a time basis according to the respective lengths of those periods.

Abolition of bingo duty

88

• (1) Omit—

• (a) sections 17 to 20C and 31 of the Betting and Gaming Duties Act 1981 (bingo duty);

• (b) the cross-heading before section 17 of that Act;

• (c) Schedule 3 to that Act (further provision about bingo duty).

• (2) Schedule 13 makes—

• (a) provision in consequence of subsection (1);

• (b) transitional and saving provision.

• (3) The repeals and amendments made by this section and Schedule 13 come into force on 1 April 2026.

• (4) The Treasury may by regulations make such further transitional, transitory or saving provision as the Treasury consider appropriate in connection with the coming into force of those repeals and amendments.

• (5) Regulations under subsection (4) are to be made by statutory instrument.

Alcohol duty

Rates of duty

89

• (1) Part 2 of F(No.2)A 2023 (alcohol duty) is amended as follows.

• (2) For Schedule 7 (main rates) substitute—

Schedule 7

Alcoholic strength of alcoholic product	Rate of duty per litre of alcohol in the product
Less than 3.5%	£9.96
At least 3.5% but less than 8.5%	See Table 2
At least 8.5% but not exceeding 22%	£30.62
Exceeding 22%	£33.99
Description of alcoholic product (of an alcoholic strength of at least 3.5% but less than 8.5%)	Rate of duty per litre of alcohol in the product
---	---
Still ciderSparkling cider of an alcoholic strength not exceeding 5.5%	£10.39
Beer	£22.58
Spirits, wine and other fermented productsSparkling cider of an alcoholic strength exceeding 5.5%	£26.61

• (3) For Schedule 8 (reduced rates for qualifying draught products) substitute—

Schedule 8

Description of alcoholic product	Rate of duty per litre of alcohol in the product
Alcoholic products of an alcoholic strength of less than 3.5%	£8.58
Still cider of an alcoholic strength of at least 3.5%Sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%	£8.95
Beer, spirits, wine and other fermented products of an alcoholic strength of at least 3.5% (but less than 8.5%)Sparkling cider of an alcoholic strength exceeding 5.5%	£19.45

• (4) For Schedule 9 (duty discount for small producer alcoholic products)—

Schedule 9

Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%	Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%	Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%	Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%	Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	9.96	-
2	5	50	2.53	49.80
3	50	100	1.52	163.74
4	100	200	0.51	239.71
5	200	600	-	290.35
6	600	1000	-	290.35
7	1000	4500	-0.08	290.35
Spirits of an alcoholic strength of less than 3.5%	Spirits of an alcoholic strength of less than 3.5%	Spirits of an alcoholic strength of less than 3.5%	Spirits of an alcoholic strength of less than 3.5%	Spirits of an alcoholic strength of less than 3.5%
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	6.58	-
2	5	50	2.53	32.92
3	50	100	1.52	146.86
4	100	200	0.51	222.82
5	200	600	-	273.47
6	600	1000	-	273.47
7	1000	4500	-0.08	273.47
Still cider of an alcoholic strength of at least 3.5%;sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%	Still cider of an alcoholic strength of at least 3.5%;sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%	Still cider of an alcoholic strength of at least 3.5%;sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%	Still cider of an alcoholic strength of at least 3.5%;sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%	Still cider of an alcoholic strength of at least 3.5%;sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%
---	---	---	---	---
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	10.39	-
2	5	50	2.64	51.95
3	50	100	1.59	170.87
4	100	200	0.53	250.15
5	200	600	-	303
6	600	1000	-	303
7	1000	4500	-0.09	303
Beer of an alcoholic strength of at least 3.5%	Beer of an alcoholic strength of at least 3.5%	Beer of an alcoholic strength of at least 3.5%	Beer of an alcoholic strength of at least 3.5%	Beer of an alcoholic strength of at least 3.5%
---	---	---	---	---
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	20.67	-
2	5	112.5	11.48	103.34
3	112.5	225	10.33	1,337.72
4	225	450	5.74	2,500.33
5	450	900	3.44	3,792.12
6	900	1350	-	5,342.27
7	1350	4500	-1.70	5,342.27
Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%	Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%	Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%	Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%	Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%
---	---	---	---	---
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	26.61	-
2	5	50	2.71	133.05
3	50	100	2.71	254.84
4	100	200	1.35	390.16
5	200	600	-	525.48
6	600	1000	-	525.48
7	1000	4500	-0.15	525.48
Spirits of an alcoholic strength of at least 3.5%	Spirits of an alcoholic strength of at least 3.5%	Spirits of an alcoholic strength of at least 3.5%	Spirits of an alcoholic strength of at least 3.5%	Spirits of an alcoholic strength of at least 3.5%
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	21.65	-
2	5	50	2.71	108.26
3	50	100	2.71	230.04
4	100	200	1.35	365.36
5	200	600	-	500.68
6	600	1000	-	500.68
7	1000	4500	-0.14	500.68
Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%	Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%	Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%	Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%	Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%
---	---	---	---	---
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	8.58	-
2	5	50	2.18	42.90
3	50	100	1.31	141.06
4	100	200	0.44	206.50
5	200	600	-	250.12
6	600	1000	-	250.12
7	1000	4500	-0.07	250.12
Spirits of an alcoholic strength of less than 3.5%	Spirits of an alcoholic strength of less than 3.5%	Spirits of an alcoholic strength of less than 3.5%	Spirits of an alcoholic strength of less than 3.5%	Spirits of an alcoholic strength of less than 3.5%
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	5.67	-
2	5	50	2.18	28.36
3	50	100	1.31	126.51
4	100	200	0.44	191.95
5	200	600	-	235.58
6	600	1000	-	235.58
7	1000	4500	-0.07	235.58
Still cider of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%	Still cider of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%	Still cider of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%	Still cider of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%	Still cider of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%
---	---	---	---	---
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	8.95	-
2	5	50	2.28	44.75
3	50	100	1.37	147.19
4	100	200	0.46	215.48
5	200	600	-	261.01
6	600	1000	-	261.01
7	1000	4500	-0.07	261.01
Beer of an alcoholic strength of at least 3.5%	Beer of an alcoholic strength of at least 3.5%	Beer of an alcoholic strength of at least 3.5%	Beer of an alcoholic strength of at least 3.5%	Beer of an alcoholic strength of at least 3.5%
---	---	---	---	---
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	17.80	-
2	5	112.5	9.89	89.02
3	112.5	225	8.90	1,152.29
4	225	450	4.95	2,153.74
5	450	900	2.97	3,266.46
6	900	1350	-	4,601.73
7	1350	4500	-1.46	4,601.73
Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%	Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%	Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%	Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%	Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%
---	---	---	---	---
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	19.45	-
2	5	50	1.98	97.25
3	50	100	1.98	186.27
4	100	200	0.99	285.18
5	200	600	-	384.09
6	600	1000	-	384.09
7	1000	4500	-0.11	384.09
Spirits of an alcoholic strength of at least 3.5%	Spirits of an alcoholic strength of at least 3.5%	Spirits of an alcoholic strength of at least 3.5%	Spirits of an alcoholic strength of at least 3.5%	Spirits of an alcoholic strength of at least 3.5%
Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	15.83	-
2	5	50	1.98	79.13
3	50	100	1.98	168.15
4	100	200	0.99	267.05
5	200	600	-	365.96
6	600	1000	-	365.96
7	1000	4500	-0.10	365.96

• (5) In consequence of the amendments made by the preceding subsections of this section, in Schedule 2 to the Travellers’ Allowances Order 1994 (which provides in certain circumstances for a simplified calculation of excise duty on goods brought into Great Britain)—

• (a) in the entry relating to beer, in the second column, for “£0.91” substitute “£0.95”,

• (b) in the entry relating to still wine, in the second column, for “£3.40” substitute “£3.52”,

• (c) in the entry relating to sparkling wine, in the second column, for “£3.40” substitute “£3.52”,

• (d) in the entry relating to cider, in the second column, for “£0.46” substitute “£0.48”,

• (e) in the entry relating to sparkling cider of an alcoholic strength not exceeding 5.5% by volume, in the second column, for “£0.46” substitute “£0.48”,

• (f) in the entry relating to sparkling cider of an alcoholic strength exceeding 5.5% but less than 8.5% by volume, in the second column, for “£1.80” substitute “£1.86”,

• (g) in the entry relating to other fermented products, in the second column, for “£3.40” substitute “£3.52”, and

• (h) in the entry relating to spirits, in the second column, for “£12.30” substitute “£12.75”.

• (6) The amendments made by this section are treated as having come into force on 1 February 2026.

Tobacco products duty

Rates of duty effective from 6pm on 26 November 2025

90

• (1) In Schedule 1 to TPDA 1979 (table of rates of tobacco products duty), for the Table substitute—

1 Cigarettes	An amount equal to the higher of—16.5% of the retail price plus £353.50 per thousand cigarettes, or£471.93 per thousand cigarettes.
2 Cigars	£440.93 per kilogram
3 Hand-rolling tobacco	£503.80 per kilogram
4 Other smoking tobacco and chewing tobacco	£193.87 per kilogram
5 Tobacco for heating	£363.36 per kilogram

• (2) In consequence of the provision made by subsection (1), in Schedule 2 to the Travellers’ Allowances Order 1994 (which provides in certain circumstances for a simplified calculation of excise duty on goods brought into Great Britain)—

• (a) in the entry relating to cigarettes, for “£446.67” substitute “£471.93”,

• (b) in the entry relating to hand rolling tobacco, for “£476.83” substitute “£503.80”,

• (c) in the entry relating to other smoking tobacco and chewing tobacco, for “£183.49” substitute “£193.87”,

• (d) in the entry relating to cigars, for “£417.33” substitute “£440.93”,

• (e) in the entry relating to cigarillos, for “£417.33” substitute “£440.93”, and

• (f) in the entry relating to tobacco for heating, for “£103.17” substitute “£109.01”.

• (3) The amendments made by this section are treated as having come into force at 6pm on 26 November 2025.

Rates of duty effective from 1 October 2026

91

• (1) In Schedule 1 to TPDA 1979 (table of rates of tobacco products duty), for the Table substitute—

1 Cigarettes	An amount equal to the higher of—16.5% of the retail price plus £394.09 per thousand cigarettes, or£518.75 per thousand cigarettes.
2 Cigars	£508.12 per kilogram
3 Hand-rolling tobacco	£574.30 per kilogram
4 Other smoking tobacco and chewing tobacco	£248.07 per kilogram
5 Tobacco for heating	£426.47 per kilogram

• (2) In consequence of the provision made by subsection (1), in Schedule 2 to the Travellers’ Allowances Order 1994 (which provides in certain circumstances for a simplified calculation of excise duty on goods brought into Great Britain)—

• (a) in the entry relating to cigarettes, for “£471.93” substitute “£518.75”,

• (b) in the entry relating to hand rolling tobacco, for “£503.80” substitute “£574.30”,

• (c) in the entry relating to other smoking tobacco and chewing tobacco, for “£193.87” substitute “£248.07”,

• (d) in the entry relating to cigars, for “£440.93” substitute “£508.12”,

• (e) in the entry relating to cigarillos, for “£440.93” substitute “£508.12”, and

• (f) in the entry relating to tobacco for heating, for “£109.01” substitute “£127.94”.

• (3) The amendments made by this section come into force on 1 October 2026.

Taxes relating to vehicles

Vehicle excise duty for light passenger or light goods vehicles etc

92

• (1) Schedule 1 to VERA 1994 (annual rates of vehicle excise duty) is amended as follows.

• (2) In paragraph 1 (general rate)—

• (a) in sub-paragraph (2) (vehicle not covered elsewhere in Schedule with engine cylinder capacity exceeding 1,549cc), for “£360” substitute “£375”, and

• (b) in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with engine cylinder capacity not exceeding 1,549cc), for “£220” substitute “£230”.

• (3) In paragraph 1B, for the Table substitute—

CO2 Emissions Figure	CO2 Emissions Figure
(1)	(2)	(3)
Exceeding or, in the first row, equal to or exceeding	Not exceeding	Rate
g/km	g/km	£
0	100	20
100	110	20
110	120	35
120	130	170
130	140	200
140	150	225
150	165	275
165	175	325
175	185	360
185	200	410
200	225	445
225	255	760
255	—	790

• (4) In the sentence immediately following the Table in that paragraph, for the words from “as if” to the end substitute “as if, in column (3), in the last two rows, “445” were substituted for “760” and “790”.”

• (5) In paragraph 1GC, for Table 1 (vehicles other than higher rate diesel vehicles) substitute—

CO2 Emissions Figure	CO2 Emissions Figure
(1)	(2)	(3)
Exceeding or, in the first row, equal to	Not exceeding	Rate
g/km	g/km	£
0	0	10
0	50	115
50	75	135
75	90	280
90	100	365
100	110	405
110	130	455
130	150	560
150	170	1410
170	190	2270
190	225	3420
225	255	4850
255	—	5690

• (6) In that paragraph, for Table 2 (higher rate diesel vehicles) substitute—

CO2 Emissions Figure	CO2 Emissions Figure	Rate
(1)	(2)	(3)
Exceeding or, in the first row, equal to or exceeding	Not exceeding	Rate
g/km	g/km	£
0	50	135
50	75	280
75	90	365
90	100	405
100	110	455
110	130	560
130	150	1410
150	170	2270
170	190	3420
190	225	4850
225	255	5690
255	—	5690

• (7) In paragraph 1GD(1)(rates for any other licence for light passenger vehicles registered on or after 1 April 2017), for “£195” substitute “£200”.

• (8) In paragraph 1GE(2) (rates for light passenger vehicles registered on or after 1 April 2017 with a price exceeding £40,000), for “£620” substitute “£640”.

• (9) In paragraph 1J(a) (rates for light goods vehicles that are not pre-2007 or post-2008 lower emission vans), for “£345” substitute “£360”.

• (10) In paragraph 2(1) (rates for motorcycles)—

• (a) in paragraph (a) (engine cylinder capacity not exceeding 150cc), for “£26” substitute “£27”,

• (b) in paragraph (b) (motorbicycles with engine cylinder capacity exceeding 150cc but not exceeding 400cc), for “£57” substitute “£59”,

• (c) in paragraph (c) (motorbicycles with engine cylinder capacity exceeding 400cc but not exceeding 600cc), for “£87” substitute “£90”, and

• (d) in paragraph (d) (other cases), for “£121” substitute “£125”.

• (11) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2026.