§ Mr. Eggarasked the Chancellor of the Exchequer what is the Government's attitude towards the policy of the European Commission on the harmonisation of the value added tax exemption thresholds for small businesses in the member countries of the European Economic Community; and if he will make a statement.
§ Mr. HayhoeThe European Commission, in its report on national VAT schemes for small businesses, has suggested that the VAT exemption threshold should be harmonised at a level of 10,000 ecu—about £5,900—to be increased by reference to inflation, and that member states with higher levels should freeze their exemption thresholds until the Community limit catches up. This report was placed in the library with an explanatory memorandum on 27 February 1984. The European Commission has not yet made a formal proposal to the council on this subject and when such a proposal is made it would require the unanimous approval of the member states before it could be implemented. The Commission's report did not demonstrate that the United Kingdom limit, raised in the budget to £19,500, causes any significant distortion of intra-Community trade and the Government could not accept a harmonised limit pitched at such an unrealistically low level.