HC Deb 15 January 1998 vol 304 cc473-4
5. Mr. Woodward

What plans he has to impose VAT on research grants by charitable trusts; and if he will make a statement. [21055]

The Financial Secretary to the Treasury (Dawn Primarolo)

There are no plans to impose VAT on research grants made by charitable trusts.

Mr. Woodward

I declare an interest in this subject. In the wake of the report by the National Council for Voluntary Organisations, which says that the impact of the Government's Budget will be to impose on charities an additional £350 million because of the changes to advance corporation tax, will the Minister take this opportunity to rule out definitively an attempt by Customs and Excise to impose VAT on research grants for scientific purposes?

Dawn Primarolo

I made it clear to the hon. Gentleman that VAT on research grants will not be imposed on charitable trusts. With regard to the ACT changes, which the Government made on the basis of economic and long-term planning, the Chancellor recognised the special position of charities and transitional arrangements were put in place—a total of £1 billion will be spent over seven years on that issue. I am surprised that the hon. Gentleman did not go on to mention, given his commitment and involvement in charities, the Government's review of charities taxation, which is widely welcomed by all concerned in the charitable sector. When I was at the annual general meeting yesterday of the charitable taxation reform group, we had a positive discussion about the future of charities.

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