HC Deb 27 April 1971 vol 816 cc221-3
22 and 40. Mr. Boscawen

asked the Chancellor of the Exchequer (1) what is the cost to the Revenue of the concession allowed to self-employed craftsmen to sell up to £500 worth of their goods without incurring purchase tax; and how many individuals are in receipt of this concession;

(2) whether, in view of the fact that the £500 purchase tax concession to self-employed craftsmen was introduced 15 years ago, he will now adjust it in order to take account of the changed value of the £ sterling.

Mr. Higgins

There is no purchase tax concession for self-employed craftsmen as such; but there is a general exemption limit of £500. This is designed to reduce collection costs. No information is available as to the cost to the Revenue of the exemption or the number of individuals who benefit from it. But, taking the two factors together, the Revenue probably gains from the arrangement. An increase in the exemption level would, however, lead to objections from those competing with small traders.

Mr. Boscawen

Does not my hon. Friend agree that it would help the Revenue to gain a bit more if it increased that exemption, which has helped many hundreds of craftsmen to remain in self-employment after they have retired from other jobs? Will he consider doubling it, as the exemption limit in annuities for self-employed has been doubled?

Mr. Higgins

I fully understand my hon. Friend's point. I have received representations from a number of hon. Members on the subject since last June. But if we were to raise the limit just for reasons of reducing administrative costs rather than helping small traders as such it would lead to very considerable problems with regard to competition with other normal commercial organisations.

Mr. Nicholas Edwards

Does my hon. Friend realise that an increase in the limit would be of great assistance in the remoter areas and for the tourist industry?

Mr. Higgins

I am not quite clear how it would affect the tourist industry. It certainly is the case that in a number of remote areas there are small traders of this kind. For the reasons I have mentioned—and I have looked into the matter very closely—I do not think a change would be justified.

Mr. Emery

The level of £500 was set many years ago. If it was right at the prices then, surely it should be increased now?

Mr. Higgins

It was indeed a considerable time ago. But I have tried to hit a balance, given the number of complaints that we have had from both sides as to the eflect on competition if we raised the limit.

Mr. Maclennan

May I explain to the hon. Gentleman very briefly how the concession benefits the tourist industry in the remoter parts of the country? Many craftsmen operate in those areas, and their produce helps to boost the tourist contribution to the local economies.

Mr. Higgins

I fully appreciate the indirect effect. I thought that my hon. Friend had something more direct in mind. I have received representations, and I have examined some of the products of the kind which the hon. Gentleman mentioned, which undoubtedly have a tourist attraction.