§ Mr. MarlowTo ask the Chancellor of the Exchequer if, pursuant to his statement of 21 June,Official Report, column 959, he will give his assessment of the likely effects of the value added tax ruling of the European Court on the cost of the Channel tunnel; and if he will make a statement.
§ Mr. Lilley[holding answer 28 June 1988]: I cannot comment specifically on individual taxpayers. However, any contract entered into prior to 21 June 1988 will continue to be zero-rated for the life of the contract. In addition, firms registered for VAT will be able to reclaim VAT on construction contracts entered into on or after 21 June 1988, subject to the normal rules for deduction of input tax.