§ Mr. Alfred Morris
asked the Chancellor of the Exchequer what representations he has received for relief from value added tax from the Spastics Society, the Save the Children Fund, Dr. Barnardo's, the Royal National Institute for the Deaf, the Royal National Institute for the Blind, the National Society for Mentally Handicapped Children, Help the Aged and the National Children's Home; what reply he is sending; what action he is taking; and if he will make a statement.
§ Mr. Peter Rees
The Spastics Society wrote to my right hon. and learned Friend the Chancellor of the Exchequer on 17 October making representations on behalf of itself and the other organisations mentioned about the burden of value added tax on charities. The society also proposed its inclusion among the bodies for which special provision is made by section 15 of the Finance Act 1972.701W
The reply—a copy will be sent to the right hon. Member as soon as possible—will indicate that such action would be inappropriate, since section 15 is designed to avoid the burden of tax falling on activities funded by local rates and similar compulsory levies. The reply will also indicate that no change is contemplated in the general position of charities under value added tax, which is that, whilst tax does not fall upon their ordinary charitable activities, tax on the goods and services received for the purposes of those activities cannot be recovered.
Any wider general relief from VAT for charities would cost too much in revenue and complicate the tax unduly. The Government decided, therefore, to help charities in other ways so far as resources permit, and my right hon. and learned Friend the Chancellor of the Exchequer included substantial direct tax concessions for the benefit of charities in this year's Budget.