§ Mr. Leeasked the Chancellor of the Exchequer how many over-assessment errors in value added tax calculations came to the notice of his Department for 1977; how much of that which was erroneously taken by his Department during that year has been refunded; and what were the corresponding figures for 1975 and 1976.
§ Mr. Robert SheldonValue added tax is essentially a self-assessed tax. About 3½ per cent. of the control visits by Customs and Excise officers to registered persons in 1977—or some 14,000 visits—produced evidence of overdeclarations of tax and those concerned were advised to take credits from their subsequent returns for nearly £4½ million. The comparable figures for 1976 were about the same number of cases involving just under £4 million of overdeclared tax.
When underdeclarations of tax are discovered on control visits the officers issue assessments under section 31 of the Finance Act 1972, and appeals against such assessments may be made to local VAT offices or to VAT tribunals, particularly on the basis of additional information. In 1977 officers issued some 137,000 assessments for a total of about £51 million and reductions in assessments were made in some 5,500 cases for a total of about £2.6 million. In 1976 a similar number of reductions of assessments were made for a total of just over £2 million.
I regret that the information requested was not collated in 1975.
§ Mr. Trotterasked the Chancellor of the Exchequer whether he proposes to take action to correct the position resulting from the success of Her Majesty's 872W Customs and Excise in claiming before the Manchester tribunal in the case of Emerald Electronics that distress signalling equipment for the elderly is chargeable to the higher rate of value added tax.
§ Mr. Robert SheldonI shall let the hon. Member have a reply as soon as possible.