VAT (Hansard, 10 December 1993)

§ Mr. Nicholas Brown
To ask the Chancellor of the Exchequer (1) how much value added tax was paid per annum by a family consisting of a married man on half of average male earnings, his wife and two children in 1978–79; and what is the most recent estimate;
(2) what estimate he has as to the average VAT paid per annum by a family consisting of a married man on (a) half 398W of, (b) three quarters of, (c) twice and (d) three times average male earnings, his wife and two children in 1978–79; and what is the most recent estimate.

§ Sir John Cope
Estimates of VAT payments outside the range of three quarters to one-and-a-half times average earnings are not available. It is estimated that a married couple with two children on three quarters average earnings will pay approximately £700 a year in VAT in 1993–94 and £1,700 a year in VAT in 1993–94 at one-and-a-half times average earnings. Figures for VAT payments by such a family in earlier years, including 1978–79 have been deposited in the Library. Estimates of VAT payments are subject to wide margins of error.

§ Mr. Nicholas Brown
To ask the Chancellor of the Exchequer if he will list all the changes to the VAT system in each year since 1978–79, including both changes in the rate of VAT and changes in classification of goods and services.

§ Sir John Cope
On 18 June 1979 the standard rate of VAT of 8 per cent. and the higher rate of 12½per cent. were unified at 15 per cent., which was raised to 17½ per cent. from 1 April 1991. A comprehensive list of all changes in the VAT system going back to 1978–79 could be made only at disproportionate cost, but the main changes to the VAT liability of goods and services have been the extension of the standard rate to:

—hot take away food from 1 May 1984;

—building alterations from 1 June 1984;

—the publication of advertisements in newspapers etc., from 1 May 1985;

—the construction and sale of new non-residential buildings from 1 April 1989; and

—fuel and power supplied to business, and to water and sewerage supplied to manufacturing industry, from I July 1990.

Landlords were given the option to tax non-residential rents and sales of used buildings from 1 August 1989. Supplies of stockbroking services, which were previously standard rated, were made exempt from 1 January 1990.

§ Mr. Nicholas Brown
To ask the Chancellor of the Exchequer what is his most recent estimate of how much VAT is paid per annum by(a) an average family and (b) a married couple on average income; and how much they paid in 1978–79.

§ Sir John Cope
It is estimated that a family consisting of a married couple on average earnings with two children will pay approximately £1,010 a year in VAT, and a couple with no children £980 a year in VAT in 1993–94. Comparable figures for the same family types for 1978–79 have been deposited in the Library. Estimates of VAT payments are subject to wide margins of error.