§ 12. Mr. Pavittasked the Chancellor of the Exchequer if he will take steps to exempt charities from value added tax in respect of those services which are provided through them by local authorities.
§ Mr. Bruce-GardyneThe services provided by charities to local authorities are already generally exempt or outside the scope of the tax.
§ Mr. PavittHow can the Minister justify the fact that the Royal National Institute for the Deaf pays £20,000 VAT on residential accommodation for the deaf and for the psychiatrically disturbed? How does he reconcile what has been put to him by the Spastics Society with statements by his right hon. Friend the Secretary of State for Social Services to the effect that he wants greater co-operation between the voluntary bodies and the social services? If his right hon. and learned Friend the Chancellor of the Exchequer intends to take action in the Budget, will he make any proposals retrospective, so that all charities that have been clobbered for VAT on residential accommodation get their money back?
§ Mr. Bruce-GardyneI assure the hon. Gentleman and the House that my right hon. and learned Friend and all Ministers are deeply indebted to the charities for the services that they provide, especially the sort of services to which the hon. Gentleman has referred. It is a fact that charities have always paid indirect tax. They paid purchase tax in the old days. They also paid petrol tax. We have looked at the matter carefully and continue to examine it. It is extremely difficult to find any satisfactory way of giving exemption from a particular form of indirect taxation. It is something that successive Governments have always found it impossible to offer.