SELF-SUPPLY (Hansard, 11 July 1972)

§ Mr. Higgins
I beg to move Amendment No. 16, in page 5, line 24, leave out from 'securing' to 'are' in line 26 and insert: 'subject to any exceptions provided for by or under the order, that, where in such circumstances as may be specified in the order goods of a description so specified'. I understand that we can take with it Amendment 17, in line 34, at beginning insert 'the goods'.
There was nothing sinister in the drafting of the international sort which the hon. Member for Ashton-under-Lyne (Mr. Sheldon) suggested. Often what 1455 can be explained fairly simply in common sense wording is not adequate for legal purposes. The problem in drafting Bills is that one does so in a legal form rather than in a common sense form. It is a matter for lawyers. However, this is not the first occasion on which the House has been confronted with that problem. The conclusion normally reached is that drafting should be done in the form which the parliamentary draftsmen and lawyers find acceptable rather than the form which those concerned with common sense find acceptable. Whether that is invariably the case is another matter.
Amendment 16 is a technical Amendment to enable the scope of self-supplying Orders in respect of goods to be allocated by reference to the circumstances in which the self-supply is made. Amendment 17 is a purely consequential drafting Amendment. If the Amendments are not accepted, the scope of self-supply Orders for goods could be restricted only by reference to the description of the goods.
The purpose of Clause 6 is to enable the Treasury to treat as "supplied" for VAT purposes, specified goods or services which a person supplies to himself for use in his business. Such self-supplies are then specially taxable. Office stationery purchased for self-supply is an example, but there are others. The need for an order on office stationery has been foreseen in the White Paper. If we do not have the power there is a risk of distortion of competition because of the introduction of the tax. The purpose of the self-supply order, by specially taxing those self-supplies as though they had been purchased from another person, is to restore neutrality of competition. This is something which is familiar to those who dealt with the matter upstairs.
The point the Amendment seeks to make is that it is necessary to limit the scope of self-supply orders—in the case of business stationery to exempt and partly-exempt persons. There are other classes where similar considerations may apply. As drafted, however, Clause 6 enables exceptions to an order to be made by reference to a description of goods but not by reference to a description of person or the circumstances in which the self-supply is made.
1456 If the House did not accept the Amendment, the self-supply order in respect of for example stationery would have to apply not only to exempt and partly-exempt persons but also to wholly taxable persons. Since wholly taxable persons can offset all their input tax on stationery they buy in, they can obtain no tax advantage by making self-supplies. The result would be to impose an administrative burden on wholly taxable persons to no purpose. The vires therefore needs to be extended to enable exceptions to self-supply orders to be made by reference to the circumstances of the self-supply.
That is the purpose of the Amendment. Although it is a technical Amendment, I hope that it will not arouse the degree of controversy which the previous Amendment aroused and that the House will see fit to accept it.

§ Mr. Dalyell
Is this worth the administrative burden? Does not this provision involve a considerable administrative burden?

§ Mr. Higgins
We believe that this is an important power. We are anxious that there should not be a distortion of competition as a result of the tax. No doubt the power will be used sparingly. Indeed, another case has come to our attention which we think may be a possible use of the power. Certainly we think that this provision is justified and that it will be useful.