§ Mr. Craigenasked the Chancellor of the Exchequer what is the VAT liability on marine diesel engines and on spare parts, respectively, installed in fishing vessels where such craft are (a) under 15 tons and (b) over 15 tons.
§ Mr. Robert SheldonThe supply of a ship, complete with an engine, which is neither of a gross tonnage of less than 15 tons nor designed or adapted for use for recreation or pleasure is zero-rated; supplies of other vessels, complete with engines, are chargeable at the 25 per cent. rate of VAT.
Separate supplies of marine diesel engines are chargeable at the 25 per cent. rate if they are accessories to, or of a kind suitable for use as parts of, boats which are themselves chargeable at the higher rate; separate supplies of other marine diesel engines remain chargeable at the 8 per cent. standard rate.
Most spare parts for marine diesel engines are chargeable at the 8 per cent. standard rate. Tax on purchases by a taxable person for the purpose of his business is of course deductible as input tax subject to the normal rules.
§ Sir G. Sinclairasked the Chancellor of the Exchequer if he will exempt from VAT air service training courses taken by unsponsored students.
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§ Mr. Robert SheldonI cannot hold out any hope of exemption from VAT for air service training courses.
However, the 25 per cent. rate of VAT does not apply to the hire of a higher-rated aircraft with the services of an accompanying instructor for the purpose of a flying lesson; comprehensive courses of air service training leading to a commercial pilot's licence are regarded as a whole, as supplies of services chargeable at the 8 per cent. standard rate; and Customs and Excise are currently conidering whether other flying training courses, including those leading to a private pilot's licence, can similarly be regarded as supplies of standard-rated services.