§ 15. Mr. Meadowcroftasked the Chancellor of the Exchequer what representations he has had in relation to the impact on the publications of charitable organisations of value added tax on advertisements.
§ Mr. HayhoeThe answer is none, Sir.
§ Mr. MeadowcroftIs the Minister aware that the initial survey by the Charities Act Reform Group suggests that, on the basis of last year's advertising, the cost to charities will be £1.2 million? That may not be a significant sum for the Government, but it is a hugely significant sum for charities. Will he therefore reconsider exempting charities from VAT with regard to advertising in journals?
§ Mr. HayhoeThere is not a charge of around £1 million in connection with the question which the hon. Gentleman asked, because he was talking about the impact of value added tax on the publications of charitable organisations—that is, things like church magazines and year books for charities. Anyway, such year books were taxed before the Budget. I rather suspect that the hon. Gentleman got his question all wrong.
§ Mr. SternIn the context of my right hon. Friend's recent Budget, is my hon. Friend the Minister aware that, as against the costs which some charities will suffer as a result of the imposition of VAT on advertising, many, albeit often different, charities will greatly benefit from the increased relief to be given for charitable covenants?
§ Mr. HayhoeMy hon. Friend is right. On the wider question, extending VAT to newspaper and magazine advertising will mean that charity advertising will attract tax of about £1 million, but the help given to charities in the other measures which my right hon. Friend introduced in his Budget will certainly substantially exceed that amount.