§ Mr. Simon CoombsTo ask the Chancellor of the Exchequer what consultations took place with representatives of the tourism industry before the decision was taken to impose value added tax on the purchase of holiday homes.
§ Mrs. Gillian ShephardThe change in VAT liability referred to was one of a number of VAT coverage changes made in the Finance Act 1989. The position was made clear to the main trade association concerned in May 1989. The provision imposing the standard rate on holiday homes was subsequently found to be defective in a recent decision in a VAT tribunal. The statutory instrument was designed to return the legal position largely to what was intended in 1989. Before it was debated by the Standing Committee, I met representatives of the British Holiday and Home Parks Association and explained to them that, as tourist services, with the exception of public transport, are liable to VAT I saw no compelling case for a special relief for new, restricted occupancy holiday homes.