HC Deb 03 February 1953 vol 510 cc1799-800

10.0 p.m.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)

I beg to move, That the Purchase Tax (No. 10) Order, 1952 (S.I., 1952, No. 2254), dated 19th December, 1952, a copy of which was laid before this House on 23rd December, 1952, be approved. The object of this Order is to put beyond doubt the liability to Purchase Tax on the chassis of motor-cycle sidecars. The present position is, as the right hon. Gentleman the Member for Battersea, North (Mr. Jay) is I think aware, that sidecars designed to take passengers are liable to tax, and so remain; that sidecars designed for the carriage of goods are free of tax, and so remain, but this Order simply puts beyond doubt the position of the chassis without body. Some doubt has apparently arisen on this matter, and although in general the tax has been levied, in a certain number of cases the liability to tax has been doubted, and in view of the misunderstanding and the slight difficulty which has arisen, it has been thought desirable to put the matter beyond doubt.

10.2 p.m.

Mr. Douglas Jay (Battersea, North)

May I ask the hon. Gentleman two brief questions? Am I right in understanding the Order to mean that as far as the sidecar and the body without chassis is concerned the article has to be for the purpose of carrying passengers in order to attract tax; but when we come to the chassis it attracts tax whether or not it is for the purpose of carrying passengers. If that is so, perhaps the hon. Gentleman will explain why?

My second question is this, and perhaps the hon. Gentleman would convey the point to the Chancellor of the Exchequer, who, happily, is with us. I know that on the rather wider question of the Purchase Tax on motor cars the Chancellor has been taking refuge in the doctrine that he cannot alter the Purchase Tax except at the time of the Budget. I would ask the hon. Gentleman whether, so far as the legal position is concerned, if he can alter the Purchase Tax on sidecars before the Budget he can also alter the Purchase Tax on motor cars.

Mr. Boyd-Carpenter

The right hon. Gentleman will be clear that motor cars and sidecars are different vehicles. But, on the point which is perhaps of greater substance, the whole point of this Order is to put the issue beyond doubt. In practice, tax has been levied in general on the chassis, and it will continue to be under this Order. But some doubt had arisen, and the trade association concerned admitted the position was not clear and desired that the matter should be cleared up.

The answer to the right hon. Gentleman on the first point which he put is that the complete passenger sidecar, chassis plus body, is liable to tax. The complete goods vehicle, chassis plus bodywork, is free of tax. The chassis, naked and unashamed, will be subject to tax. One of the reasons for that, of course, is that a chassis, until the bodywork has been put on it, might be put to one purpose or to the other. If the matter is to be clear of doubt it is essential that the tax liability should be established on the chassis.

Question put, and agreed to.