§ Mr. John H. Osborn
asked the Chancellor of the Exchequer what steps he will now take to clarify the position of all businesses, but in particular small business, with regard to liability to VAT when these have bad debts, or losses due to fraud, theft, or other similar causes, bearing in mind the burden of making added value tax payments when there has been no sale or transaction generating cash to make such payments.
§ Mr. Robert Sheldon
Under the present law persons who are registered for VAT are required to account for tax on any taxable goods or services they supply, whether or not they receive payment from their customers: if no supply takes place no liability to VAT arises. The position with regard to VAT on bad debts has been under review and my right hon. Friend hopes to make a statement at the time of the Budget.