§ Mr. Hordernasked the Chancellor of the Exchequer what goods are currently subject to special value added tax schemes for secondhand goods; whether the review of their operation announced by the Minister of State, Treasury on 17 April 1980 has been completed; and if he will make a statement.
§ Mr. Peter ReesSecondhand schemes currently apply to cars, motor cycles, caravans, boats and outboard motors, aircraft, electronic organs, works of art, antiques and collectors' pieces. The whole area of the operation of the secondhand schemes has been carefully considered in the light of comments from interested bodies. Reactions to the current mechanism for providing relief were generally favourable and I do not therefore propose any alteration in the basic method of charging VAT on the margin. Some adverse comment was received about the extent and nature of the record-keeping requirements for the schemes. However, I am satisfied that the current requirements are necessary to prevent evasion and abuse and should therefore be retained.
As regards the scope of the schemes, many representations for relief were received. Candidates for relief should be able to satisfy two criteria, namely a demonstrable distortion of trade due to the application of VAT, and a scheme which is capable of being easily and effectively controlled by Customs and Excise. Only one 385W body to date, that dealing with the trade in secondhand guns, has presented evidence which clearly meets these requirements. I have therefore decided that a special scheme should be introduced for firearms later this year.