§ Mr. Adleyasked the Chancellor of the Exchequer what was the total sum involved in rebates paid to foreigners who claimed exemption from value added tax on their purchases of goods in the United Kingdom for each of the last five years for which figures are available.
§ Mr. Peter ReesI regret that no official statistics are available as to the amount of value added tax which has been refunded to overseas visitors by registered VAT traders under the retail export schemes.
§ Mr. Adleyasked the Chancellor of the Exchequer what is the average length of time between a foreigner's claims of value added tax rebate being made and it being submitted: and in what form it is submitted.
§ Mr. Peter ReesAny refund of value added tax where goods have been supplied under the retail export schemes is made by the retailer who sold the goods. The form which is completed by the retailer and customer at time of purchase has to be certified by a customs authority. When this has been done it is returned to the retailer who can then make any agreed refund. The length of time taken is entirely up to the retailer concerned.
§ Mr. Adleyasked the Chancellor of the Exchequer what estimate he has made of the cost to the Revenue of zero rating value added tax on the hotel bills of foreign visitors; and if he will make such an estimate if none exists.
§ Mr. Peter ReesI will let my hon. Friend have a reply as soon as possible.
§ Mr. Adleyasked the Chancellor of the Exchequer what types of consultancy services, if any, purchased by foreigners from United Kingdom companies are eligible for value added tax.
§ Mr. Peter ReesThe basic position is that consultancy services supplied by companies belonging in the United Kingdom are zero-rated when supplied to:714W
- (i) a person who belongs in a country, other than the Isle of Man, which is not a member State of the European Community;
- (ii) a person in his business capacity, but not in his private capacity, who belongs in a member State of the European Community, other than the United Kingdom.
If an overseas company has in this country an establishment, including a branch or agency, at which or for the purposes of which the consultancy services will be most direct used, the company will be regarded as belonging in the United Kingdom and supplies made to it will be treated accordingly.
The basic position does not, however, cover all types of consultancy services, the major exceptions being as follows:
Consultancy services relating to land situated outside the United Kingdom and the Isle of Man and the services of a valuer when performed outside those countries are zero-rated even when supplied to a person who belongs in the European Community and who is acting in his private capacity.
Consultancy services which fall within the exempt services in schedule 5 to the Finance Act 1972 remain exempt and are not zero-rated to foreigners.
Consultancy services relating to land in the United Kingdom and the Isle of Man are standard rated, as are those consultancy services in the fields of education, training and health which do not fall within the schedule 5 exemptions.
§ Mr. Adleyasked the Chancellor of the Exchequer how many retail outlets are entitled to offer rebates on value added tax to foreigners; and whether any specific registration to offer a rebate is required and, if so, how many are thus registered in the United Kingdom at the latest date for which figures are available.
§ Mr. Peter ReesAny trader who is registered for value added tax can use the retail export schemes. No specific registration is required.
§ Mr. Adleyasked the Chancellor of the Exchequer if any EEC member States, or associate member States, have arrangements whereby value added tax on 715W foreigner's hotel bills is eligible for rebate; and if he will list them.
§ Mr. Peter ReesI will let my hon. Friend have a reply as soon as possible.
§ Mr. Adleyasked the Chancellor of the Exchequer in which other countries value added tax rebates are made to foreigners on the purchase of any goods, but denied on the purchase of all services.
§ Mr. Peter ReesI will let my hon. Friend have a reply as soon as possible.
§ Mr. Adleyasked the Chancellor of the Exchequer if he will list the 10 countries to whom the largest sums of value added tax were rebated to their citizens on purchases in the United Kingdom for each of the last five years.
§ Mr. Peter ReesI regret that no official statistics are available to provide this information, which is not needed for any official purpose.
§ Mr. Adleyasked the Chancellor of the Exchequer what is the minimum sum of expenditure on which a foreigner may claim rebate of value added tax on purchases made in the United Kingdom.
§ Mr. Peter ReesBy agreement with our partners in the European Community a visitor here who is a resident of another member State can only purchase under the retail export schemes goods which are above a certain value. This value depends on which member country is the final destination of the Community traveller. These limits are £50, inclusive of tax, for exports to the Republic of Ireland, £90 to Denmark and £120 to other countries in the European Community. For other travellers there is no official limit.
§ Mr. Adleyasked the Chancellor of the Exchequer what criteria he has laid down which results in foreigners being able to claim exemption from value added tax on purchases of goods but not services.
§ Mr. Peter ReesThe basic principle is that foreign visitors are eligible for relief from VAT using the retail export schemes, only for goods which are actually exported from the United Kingdom, Goods which are not exported or are used in this country are not relieved. Services supplied, used and enjoyed in this country are also not relieved of tax.
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§ Mr. Adleyasked the Chancellor of the Exchequer if recruitment services offered by United Kingdom companies to foreign companies or individuals are eligible for rebate of value added tax.
§ Mr. Peter ReesRecruitment services supplied by a company belonging in the United Kingdom to a company or individual belonging outside the United Kingdom and the Isle of Man are normally zero-rated for the purposes of value added tax. When supplied to individuals belonging in another member State of the European Community, however, the services may be zero rated only if provided to a person acting in his business capacity.
If an overseas company has in this country an establishment including a branch or agency, at which or for the purposes of which the recruitment services will be most directly used, the company will be regarded as belonging in the United Kingdom and the services will be taxable at the standard rate.
§ Mr. Adleyasked the Chancellor of the Exchequer what percentage he estimates of value added tax rebate eligible for claiming by foreigners on their purchases in the United Kingdom was actually claimed, in the latest year for which information is available; and if he will make a statement.
§ Mr. Peter ReesIt is not possible to make such an estimate. In theory all goods purchased by foreigners could have been exported either by the supplier direct or by the customer himself and relief obtained, but many of the goods purchased are consumed here or are given away as presents.
§ Mr. Adleyasked the Chancellor of the Exchequer if he will indicate the rate of value added tax applicable on hotel accommodation in each of the nine EEC countries.
§ Mr. Peter ReesI will let my hon. Friend have a reply as soon as possible.
§ Mr. Adleyasked the Chancellor of the Exchequer if it is his policy to seek to inform foreign visitors that they are eligible for value added tax rebate on their purchases of goods bearing value added tax.
§ Mr. Peter ReesYes. The relief given by the retail export schemes is referred to in the publications issued by the 717W British Tourist Authority and any inquirer will be given the full details of the schemes by Her Majesty's Customs and Excise.