§ Mr. MudieTo ask the Chancellor of the Exchequer what VAT treatment has been agreed between the British Bankers Association and Her Majesty's Customs and Excise with regard to the VAT treatment of supplies of non-executive directors' services made by investing institutions to investee companies.
§ Sir John CopeThere has been no specific agreement concerning non-executive directors' fees. These fall to be treated in the same way as management fees which are184W included in the list of guidelines agreed between Customs and the British Bankers Association. Where a director is appointed to the board of the United Kingdom investee company as a condition of a loan, any charges for the director's services are part of the consideration for the loan, an exempt supply. Alternatively, where the investor acquires shares and exercises the right to appoint a director, Customs take the view that there is no supply for VAT purposes, as any shares are supplied to the investing institution by the investee company. In either case, any associated VAT incurred by the investing institution would not be recoverable.
§ Mrs. BeckettTo ask the Chancellor of the Exchequer what were the net revenues raised by the increase in VAT from 8 per cent. to 15 per cent. in June 1979 in the first full year thereafter, in cash and current prices.
§ Sir John Cope[holding answer 2 February 1993]: As shown on page 31 of the "Financial Statement and Budget Report" 1979–80 £430 million was expected to be raised from unifying the rates of VAT at 15 per cent. in 1980–81.