HC Deb 10 July 1975 vol 895 cc729-30
22. Sir David Renton

asked the Chancellor of the Exchequer whether he is aware that VAT is being charged on building materials used to extend, improve or build village and other halls for public or charitable uses in cases where the work is being done by voluntary labour; and whether he will reconsider the charging of VAT in such cases.

Mr. Robert Sheldon

Yes, Sir. Under Schedule 4, Group 8, to the Finance Act 1972, supplies of building materials and certain other goods are zero rated when, and only when, they are supplied by a trader who is registered for VAT purposes in connection with supplies of zero-rated building construction or alteration work. However, it is sometimes possible under the law as it stands for bodies of the kind mentioned by the right hon. and learned Member so to arrange their affairs that they can benefit from zero rating. It is not possible to generalise as each case must be considered individually. I suggest that the right hon. and learned Member might let me have details of any particular case he has in mind.

Sir David Renton

When there would be such obvious justice in not charging VAT on people who are providing voluntary labour for public purposes, why must those who are concerned with this play a cat-and-mouse game with the Customs and Excise? Can the Minister simplify the procedure and draw attention to the advantages which can be obtained, and make those advantages easily available?

Mr. Sheldon

I agree with a great deal of what the right hon. and learned Gentleman says, but these anomalies were inherent in the original legislation. We intend to improve that as we go along.

Mr. Powell

Will the Minister consider whether the self-built provisions in this respect in the previous Finance Act can be extended in the manner suggested by my right hon. and learned Friend?

Mr. Sheldon

Those matters will obviously form part of any consideration of the kind which I have outlined.

Dr. M. S. Miller

As the Government have indicated that it was never the intention to impose VAT on that kind of labour, why do they not make exceptions in cases such as those mentioned by the right hon. and learned Gentleman and also in other cases of VAT on do-it-yourself houses, and make them retrospective to the time when the tax was brought in, which was not very long ago?

Mr. Sheldon

It is not for me to say what was the intention of the previous Government in bringing in the legislation which they introduced. Certainly it is our intention to reduce the anomalies as they come to light.

Mr. Cormack

Is the Minister aware that it is not only village halls which suffer, as was pointed out by my right hon. and learned Friend? Many village churches are also suffering, as the devoted efforts of congregations to raise money are being considerably hampered by the imposition of VAT on the restoration of historic buildings.

Mr. Sheldon

I understand those points. I think that there are a number of cases where assistance can be given. If the hon. Gentleman will write to me about specific cases, I shall gladly look into them.