HC Deb 17 September 1940 vol 365 cc115-6
59. Mr. Liddall

asked the Chancellor of the Exchequer the estimated cost of collection of the proposed sales tax, and what steps are proposed to prevent evasion; is it proposed that the retailer should add his profit to the total cost of the article taxed, including the tax; and, if not, what provision is made for recompensing the retailer on bad or damaged stock on which he has paid tax and is unable to collect from the public?

Sir K. Wood

As I informed the House in the course of my Budget Speech, it is not expected that the Purchase Tax will be costly to administer or that any appreciable number of additional officials or staff will be required. To prevent evasion, verification of the quarterly returns made by registered persons will be instituted. As regards the question of the retailer's profit, I would refer to the statement made by my right hon. Friend the Financial Secretary on 25th July, when he explained that it would be illegal for a retailer to charge any percentage on the tax itself. No provision is made for recompensing the retailer on bad or damaged stock and in this respect the tax must follow the purchase price as a normal trading risk which he would meet out of his gross profit.

Mr. J. J. Davidson

Surely the right hon. Gentleman's Department have by this time estimated the cost of the administration of the Purchase Tax, and cannot the right hon. Gentleman state what it is?

Sir K. Wood

No, Sir, but I think it will be small. I cannot give an estimate at present.

Mr. Davidson

Does that mean that the Minister has no estimate of the cost?

Sir K. Wood

No, Sir, but I made a statement on that matter in the course of the Debates.

Mr. R. C. Morrison

As a good deal of this tax will have to be paid by people who have lost their homes, does not the right hon. Gentleman think that it might be postponed?

60. Mr. Liddall

asked the Chancellor of the Exchequer whether it is proposed that wholesalers and manufacturers shall pay the proposed sales tax on the value of the goods invoiced, or on the amount they actually receive from their customers; and whether he will state, as no tax is payable on second-hand goods, what definition of second-hand goods does he propose to apply?

Sir K. Wood

The value prescribed by the Act is the net cash delivered price of the goods, and tax is payable on that value. There is no exemption for sales of second-hand goods. If a wholesale merchant sells them in the course of his business he will have to charge tax on them.

Mr. Liddall

Does not my right hon. Friend appreciate that, in order to save himself a great deal of difficulty in future, he should have the meaning of "second-hand" determined?

Sir K. Wood

I do not think that this should give rise to serious difficulty.