HC Deb 08 February 1996 vol 271 c465
14. Mr. Wigley

To ask the Chancellor of the Exchequer what is the latest estimate of the cost of zero rating for VAT purposes all sales by registered charities; and if he will make a statement. [12649]

Mr. Heathcoat-Amory

There are no official figures on which to base any firm estimates.

Mr. Wigley

Does the Minister accept that disability charities play a vital role in helping disabled people, particularly with care in the community? That being so, is it not invidious that disability charities should be used as tax collecting agencies and have their work set back because of the level of value added tax that they must pay?

Mr. Heathcoat-Amory

I readily acknowledge the good work that is done by disability charities. They receive help through the tax system, such as relief from business rates. The whole charitable sector receives tax relief of more than £1.5 billion per year. The hon. Gentleman will accept that VAT is a broad-based tax. It would be wrong to give charities total tax relief on their business activities, which in some cases are in competition with ordinary commercial activities.

Rev. Martin Smyth

Does the Minister agree that charities have suffered as a result of the decline in the level of tax that they can recover on covenants, the imposition of VAT at the point of sale, and the triple whammy of the loss of money to the lottery?

Mr. Heathcoat-Amory

I do not think that that is a decisive objection to our aim of, and achievements in, lowering taxes generally. The hon. Gentleman will know that lottery funding is welcome and has benefited a great many charities and at least counters any drop in revenue that is experienced across the sector.