§ Mr. David Mitchellasked the Chancellor of the Exchequer, in the light of the financial difficulties facing the zero-rated value added tax traders awaiting repayments as a result of the industrial action affecting the value added tax computer at Southend, whether he will announce a temporary concession to traders affected in this way enabling them to reduce their pay-as-you-earn payments to the Revenue by a comparable amount.
§ Mr. Robert SheldonDirect offset between an unpaid refund of value added tax and an employer's liability for pay-as-you-earn tax could not be allowed. But collectors of taxes are having regard to actual difficulties facing businesses because payments of VAT refunds are being delayed. They will not take precipitate action to collect tax falling due where there is genuine temporary difficulty about paying in such cases.
§ Mr. Kershawasked the Chancellor of the Exchequer whether, in view of the serious inconvenience to many traders by the failure of the Government to make repayments of value added tax, he will announce proposals for remedying the situation.
§ Mr. Robert SheldonI much regret that while the Customs and Excise computer is out of action it is not possible to make VAT repayments. The sheer size of the operation—about 10,000 repayment claims a day—rules out any question of doing the job manually even on a selective basis. Nor is there any valid means of distinguishing between claims, e.g. on a hardship basis. Moreover, once the industrial action is over Customs and Excise will do all it can to see that repayments are resumed as quickly as possible.
349WWhere practicable, however, arrangements are being made to help through other Government sources those traders in difficulties through non-recipt of VAT payments. For example, as my right hon. Friend the Minister of State, Department of Health and Social Security told the House on 20 March, in order to ease the cash flow of retail chemists he is arranging for an enhanced payment on account of the amounts due in respect of NHS dispensing to be paid to them at the beginning of April.
§ Mr. Gorstasked the Chancellor of the Exchequer whether he will instruct Her Majesty's Customs and Excise to remit forthwith, or make available the necessary funds, to enable value added tax repayments to be made to exporters owed in excess of £5,000 repayments despite the industrial action that has held up these repayments; and if he will ensure that such immediate action takes account of the threat to the financial viability of the firms affected by the present delay.
§ Mr. Robert SheldonI much regret that whilst the Customs and Excise computer is out of action it is not possible to make VAT repayments. The sheer size of the operation—about 10,000 repayment claims a day—rules out any question of doing the job manually, even on a selective basis. Nor is there any valid means of distinguishing between claims. Once the industrial action is over Customs and Excise will do all it can to see that repayments are resumed as quickly as possible.