§ 3 and 37. Mr. Sydney Chapmanasked the Chancellor of the Exchequer (1) what representations he has received about zero rating for the purposes of applying the value added tax the design and consultancy services within a construction organisation, and charging the full rate when the services are provided by independent professionals; and what replies he has sent;
§ (2) what representations he has received about the application of value added tax to the professional services allied to the construction industry; and what replies he has sent.
§ The Financial Secretary to the Treasury (Mr. Terence Higgins)My right hon. Friend has received representations on both these points from a number of associations and individuals. I met a delegation representing the professional associations concerned with the construction industry on 6th June, and told them that their views would be given full consideration.
§ Mr. ChapmanI am grateful to my hon. Friend for that reply. Is he aware that if the present proposals are implemented they will be illogical, onerous and unfair, since certain design services in the construction industry will be zero rated and independent firms will be VAT-ed? Will he look carefully into this matter as it is causing bitterness in the design profession?
§ Mr. HigginsI understand my hon. Friend's point about the position of independent professionals in the exempt sector. That is a theoretical description of the situation, but there are many factors which influence companies in deciding whether to employ independent architects or surveyors. I do not think it can 1167 be argued that VAT would be the decisive factor.
§ Mr. MaclennanWhen does the Chancellor expect to complete his consideration of this question and to inform the House?
§ Mr. HigginsAt the appropriate time.