HC Deb 29 October 1984 vol 65 cc820-1W
Mr. Teddy Taylor

asked the Chancellor of the Exchequer if it is the policy of Her Majesty's Government that any future changes in the application of value added tax will be in the direction of harmonisation with other member states of the Common Market; and if there are any directives, regulations or decisions of the Council of Ministers which place obligations on Her Majesty's Government in this regard.

Mr. Hayhoe

Any future changes would take account of European Community obligations. Those governing the scope of VAT are set out in the Sixth VAT Directive which was implemented in the United Kingdom in 1978. No obligations exist which specify future changes and none is currently under discussion in the Council of Ministers.

Mr. Teddy Taylor

asked the Chancellor of the Exchequer how many Common Market countries charge value added tax on newspapers; and how many of this number levy the tax on an assumed charge on the provision of free newspapers.

Mr. Hayhoe

According to the latest available information, five European Community countries—France, West. Germany, Ireland, Luxembourg and the Netherlands—levy VAT on newspapers. Greece has not yet introduced VAT. Information on how many of these countries charge VAT on free newspapers on the basis of an assumed charge is not readily available.

Mr. Teddy Taylor

asked the Chancellor of the Exchequer (1) if he will publish a table showing the items provided free to the general public on which an assumed value is determined for purposes of the levying of value added tax; and if he will detail the powers under which such value added tax levies are made;

(2) what criteria and principles are applied by Customs and Excise in determining which articles, supplied free to the general public, should be subject to the determination of an assumed value for the purposes of levying value added tax.

Mr. Hayhoe

In principle all goods supplied free by businesses registered for VAT are chargeable at the appropriate rate on the cost to the person making the supply. No liability arises, however, on gifts costing less than £10, unless they are part of a series or succession of gifts made to the same person. The relevant law is contained in schedule 2 paragraph 5 to the Value Added Tax Act 1983.