§ 1. Mr. Nabarroasked the Chancellor of the Exchequer to what extent he has approved an arrangement whereby a complete set of components for a Fair-thorpe Zeta sports car is sold at £878 free of Purchase Tax, whereas the assembled car sells at £1,482, including Purchase Tax of £430; to what extent articles other than motor cars and, in particular, television sets, radios, trombones, and refrigerators are also Purchase Tax free when sold in sets of components; what guidance Customs and Excise have given in these matters; and whether he will make a statement.
§ The Economic Secretary to the Treasury (Mr. Anthony Barber)My right hon. Friend's approval is not needed for arrangements which are governed by the provisions of Purchase Tax law. The liability to tax of articles sold in parts, and of the parts themselves, are dealt with in the Notices which the Customs and Excise issue to traders.
§ Mr. NabarroAs nobody had thought in 1940–41 of selling, for example, a motor car or a refrigerator Purchase Tax free on the basis of a relatively small number of largely prefabricated units, and as the device to which attention is drawn in the Question is obviously an effort to evade Purchase Tax, would my hon. Friend look at this matter very carefully with a view to the revision of the Statute and the prevention of further evasion?
§ Mr. BarberI have noted what my hon. Friend said. He has raised several points. In cases like this, the Customs and Excise keep a watch on the extent to 1346 which this sort of thing happens, and if the scale of the operations becomes important from the revenue point of view, we might well have to consider changing the law. In the debate on the Finance Bill, 1956, this sort of question was dealt with by the then Financial Secretary in connection with home-built cars, when he moved an Amendment, which the House approved, to cover the instance of a car which was assembled either out of a kit which had been bought or from a complete collection of parts made or picked up by the man who was doing the job. I will certainly bear in mind what my hon. Friend has said.