§ 12. Sir John Farrasked the Chancellor of the Exchequer if he will take steps to relax the level of penalties on late payment of value added tax by small firms when special circumstances exist.
§ Mr. BrookeI can assure my hon. Friend that the surcharge, which comes into force in October, will not apply where the taxpayer can show a reasonable excuse to Customs and Excise or, on appeal, to an independent VAT tribunal.
§ Sir John FarrI thank my hon. Friend for his reply. Is he aware that there have been a number of cases of hardship, particularly in relation to small companies? When the new regulations are brought into effect in the autumn, will he try to iron out some of the present inflexibility?
§ Mr. BrookeCustoms and Excise is prepared to be as helpful as possible to traders who are experiencing temporary difficulties. However, in fairness to the bulk of traders who pay tax on time, it cannot allow others to regard regularly delayed payments of VAT as a convenient no-cost source of working capital.
§ Mr. SternI accept my hon. Friend's answer. Nevertheless, does he agree that since the Customs and Excise proposals became law there have been sufficient worries among small firms to indicate to his right hon. Friend the Chancellor that there might be an argument for delay in introducing the similar proposals of the Keith committee relating to income tax?
§ Mr. BrookeI shall pass on my hon. Friend's comments to my right hon. Friend.