§ Mr. David Steelasked the Chancellor of the Exchequer if he will list in the Official Report the incidence of VAT on individuals with incomes (a) below £1,000, (b) £l, 000–£2,000, (c) £2,000–£3,000, (d) £3,000–£5,000, (e) £5,000–£10,000 and (f) above £10,000.
§ Mr. Robert SheldonInformation in the precise form asked for is not available. An analysis of the incidence of taxes and social service benefits is made annually. The latest of these, covering the year 1973, is published in the December 1974 issue ofEconomic Trends. The information for purchase tax and value added tax appears in Table 2 of Appendix IV on page 1vi. There is a copy of this publication in the Library of the House.
§ Mr. Staintonasked the Chancellor of the Exchequer if he will take steps to adjust the situation whereby television rentals prior to 1st August 1975 carry VAT at 25 per cent. instead of the re- 158W instated rate of 8 per cent. and there is no provision for rebates in respect of (a) persons who paid the 25 per cent. between his Budget and 1st August and (b) persons who paid 25 per cent. on licences extending into July 1976.
§ Mr. Robert SheldonThe amendment passed by the House during the Report stage of the Finance Bill provided that the standard rate of VAT should be restored for the television rentals concerned with effect from 1st August and without any rebates. I do not propose to alter that situation for the time being.
§ Mr. Staintonasked the Chancellor of the Exchequer what is his estimate of the numbers of businesses which are exempt from VAT registration on the basis of the present £5,000 per annum taxable turnover criterion; what are the administrative and related economies thus attributable to Her Majesty's Customs and Excise; and what would be the likely numbers and economies if the £5,000 limit were raised to, respectively, £10,000, £20,000 and £50,000 per annum, respectively.
§ Mr. Robert SheldonThe number of persons exempt from registration for VAT is not known, nor is the value of administrative economies therefrom. It is estimated that if the exemption level were raised to £10,000, £20,000 and £50,000 per annum respectively, the number of persons at present registered who would fall below the next exemption levels would be of the order of 400,000, 750,000 and 1 million, respectively. Not all these persons would choose to become exempt, and some would remain registered voluntarily. Reductions of this magnitude in the number of registrations would lead to far-reaching changes in the nature and administration of VAT, but estimates of the administrative saving could be made only at the cost of disproportionate time and effort.
§ Mr. Staintonasked the Chancellor of the Exchequer what would be the loss of tax revenue for the whole of the current financial year based on experience to date were the VAT taxable turnover for registration purposes to have been raised from £5,000 per annum to £10,000, £20,000 and £50,000, respectively, each situation being 159W expressed with and without exempt businesses being entitled to reclaim VAT on business purchases.
§ Mr. Robert SheldonIt is estimated that the loss of revenue from raising the exemption level for VAT to £10,000, £20,000 and £50,000 a year would probably be about £40 million, £120 million and £350 million a year, respectively. It is impossible to forecast the costs of allowing such traders to reclaim VAT on their business purchases when they had become exempt; this must depend on the extent to which business would be diverted to such traders after they had been put into an exceptionally favourable tax position compared with their larger competitors.
§ Rear-Admiral Morgan-Gilesasked the Chancellor of the Exchequer whether he intends to publish his remarks upon the petition presented to the House on Friday, 2nd May, by the hon. and gallant Member for Winchester concerning the 25 per cent. rate of VAT on boats and equipment.
§ Mr. Denzil DaviesI have no plans to do so.