HC Deb 03 July 1979 vol 969 cc545-9W
Mr. Faulds

asked the Chancellor of the Exchequer whether he will take steps to zero rate theatre and concert tickets for value added tax purposes, in the light of the importance of the wellbeing of the performing arts in the United Kingdom.

Mr. Peter Rees

No. While the Government have sympathy with the position of the arts, the hon. Gentleman's proposal would be inconsistent with the Government's policy of switching some of the tax burden from taxes on earnings

social security contributions and other company taxation; and if he will express each as a percentage of total revenues.

Mr. Peter Rees

The table below gives the information requested for revenue raised from taxation. The figures for local government rates do not include water rates: figures for water rates, which are a charge for a trading service and not a tax, are not available.

to taxes on spending in order to restore incentives and increase the freedom of choice of the individual.

Mr. Christopher Price

asked the Chancellor of the Exchequer what would be the cost to the Exchequer of exempting female sanitary goods from value added tax; and whether he will make such an exemption.

Mr. Peter Rees

I will let the hon. Member have a reply as soon as possible

Mr. Denzil Davies

asked the Chancellor of the Exchequer, assuming an identical pattern of spending, what is the extra annual cost to a family of two adults and two children with a total gross income of (a) £4,000, (b) £8,000 and (c) £20,000 of the standardisation of value added tax at 15 per cent.

Mr. Peter Rees

, pursuant to his reply [Official Report, 21 June 1979], gave the following answer:

The latest available family expenditure survey is for 1977. It is estimated that had VAT been standardised at 15 per cent. in that year, and if the pattern of expenditure had remained unchanged, the extra cost would have been (a) about £90, (b) about £165 and (c) about £370 a year. However, since 1977 income tax changes will have altered the disposable income out of a given gross income, and hence the amount of expenditure on goods subject to VAT. These figures therefore are no more than indicative.

An article in the Economic Progress Report Supplement for June 1979 gives the expenditure on VAT as a percentage of total expenditure for different households at various income levels.

Mrs. Renée Short

asked the Chancellor of the Exchequer which EEC countries have special rates of VAT for cultural goods and services; and what items and services are so covered.

Mr. Peter Rees

, pursuant to his reply [Official Report, 25 June 1979], gave the following answer:

On the assumption that the hon. Member has in mind goods and services to which the standard rate of VAT does not apply in each case, the following summarises the available information:

Belgium: Reduced rate (6 per cent.)—concerts, entrance to cultural institutions, books, newspapers, periodicals, music.

Denmark: Exempt—cultural activities (but not including radio and television, theatres, cinemas or concerts).

France: Reduced rate (7 per cent.)—theatres, circuses, variety shows, fairs, exhibitions, zoos, books, newspapers and periodicals (All pornographic material and shows of a pornographic nature are charged at 33 ⅓ per cent.).

Germany: Exempt—theatres, orchestras, museums, zoos and botanical gardens, public libraries. Reduced rate (6 per cent.)—books, news-papers, music (6½ per cent. wef 1.7.79).

Ireland: Reduced rate (10 per cent.)—cultural activities, books, newspapers and eriodicals.

Italy: Reduced rate (6 per cent.)—theatres, puppet shows, circuses, books, periodicals, music.

Luxembourg: Reduced rate (5 per cent.)—services provided by organisers of cultural activities, libraries, books, newspapers, periodicals.

Netherlands: Reduced rate (4 per cent.)—zoos, circuses and fairs, libraries, books, newspapers, periodicals.

United Kingdom: Zero rate—books, newspapers, periodicals, music.

Mr. Adley

asked the Chancellor of the Exchequer (1) if he will undertake an inquiry into arrangements whereby hotel companies selling back-to-back hotel accommodation to overseas tour operators can qualify for the reduced rate of VAT available to people renting accommodation for more than 28 days, not withstanding the fact that the accommodation concerned is occupied by different people, rather than one individual; and if he will make a statement;

(2) if, in concert with the British Tourist Authority and the Office of Fair Trading, he will seek to prevent those British hotel companies that are taking advantage of the VAT regulations by charging VAT at the standard rate to tour operators and paying the lower rate to the Inland Revenue from continuing the practice; and if he will further draw the attention of the Office of Fair Trading to the practice with a view to ensuring that full refunds are made, and that legal action will be taken where appropriate.

Mr. Peter Rees

, pursuant to his reply [Official Report, 2 July 1979], gave the following answer:

The provision of accommodation in hotels and similiar establishments is subject to VAT at the standard rate. However, under paragraph 9 of schedule 3 to the Finance Act 1972, VAT is chargeable on a supply of hotel accommodation which exceeds 28 days partly on the basis of a reduced value. For the part of the total period of the supply which exceeds 28 days, VAT is chargeable only on that part of the hotel's total bill which relates to goods and services—for example, catering—other than the actual right to occupy the accommodation itself. The precise details and limitations of this relief are set out fully in HM Customs and Excise Notice No. 709 ("Hotels, Catering and Holiday Services"). As explained in this notice, the relief applies to supplies of hotel accommodation both to private persons and to others, for instance, commercial tour operators. I am not aware that any particular problems have arisen in regard to the entitlement to this relief, and indeed there would be difficulties in practice in attempting to distinguish between different types of hotel customers. I should nevertheless be happy to consider any points the hon. Member may wish to pass to me.

Any hoteliers who have not, for any reason, extended the benefit of the relief to supplies to tour operators, or indeed to others, but who have issued tax invoices showing VAT as chargeable on the full value of the accommodation and other services supplied, would secure no advantage from this, since they are required under VAT law to account for that amount of VAT to Customs and Excise.

Mr. Robert Taylor

asked the Chancellor of the Exchequer on what grounds it has been decided to exempt summer holidaymakers from the new rates of VAT if they had previously paid a deposit but refuse the same concession to purchasers of chattels delivered on or after 18th June but for which full payment had been made in advance.

Mr. Peter Rees

, pursuant to his reply [Official Report, 2 July 1979], gave the following answer:

If my hon. Friend will give me details of any particular problem he has in mind, I will look into it.