HL Deb 09 December 1975 vol 366 cc812-3

2.39 p.m.

Lord ALLERTON

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether there would be a saving in administrative expenses if items upon which VAT is returned were zero rated in agricultural accounts.

Lord JACQUES

My Lords, if a supplier had to charge a zero rate on supplies to farmers and a positive rate on supplies to other customers his accounts would be more complicated and more costly to maintain. Likewise the work of Customs and Excise would be more detailed and more costly. There is also the practical difficulty that the supplier would have no means of knowing whether or not supplies related to a zero rated activity.

Lord ALLERTON

My Lords, I thank the noble Lord for that reply, but may I ask whether he is aware that to the ordinary businessman it seems a curious practice to pay one lot of people to collect a tax and another lot of people to return it?

Lord JACQUES

My Lords, that is at the heart of VAT because it is a tax at each stage. Nevertheless, all the Western countries have come to the conclusion that it is the best of the alternatives for indirect taxation on goods and services.