§ Mr. Nicholas WintertonTo ask the Chancellor of the Exchequer if he will make it his policy urgently to press the European Commission for changes to the regulations relating to value added tax and the tour operators margins scheme. [32879]
§ Mr. Heathcoat-AmoryI share my hon. Friend's concern and I have recently written to Commissioner Monti urging that the European Commission should give greater priority to a full review of the EC rules on the application of VAT to tour operators.
§ Mr. WintertonTo ask the Chancellor of the Exchequer (1) what proposals he has to find means of compensating smaller tour operators for damage to their business as a result of the proposed implementation of310W the Valued Added Tax (Tour Operators) (Amendment) Order; [32881]
(2) what recent representations he has received concerning value added tax and the tour operators margins scheme; and if he will set out the action which he intends to take as a result of those representations. [32878]
§ Mr. Heathcoat-AmoryI have received many representations about the Value Added Tax (Tour Operators) (Amendment) Order 1995 which was laid before the House on 9 June, and is due to come into effect on 1 January 1996.
Many in the industry, but not all, wish to see the implementation of the change delayed.
I am aware of the concern expressed about possible distortions of competition and the effect of the order, particularly on the smaller tour operators.
Accordingly, Customs and Excise has begun a wide-ranging review of the scheme and has issued a consultation paper to trade bodies and other interested parties. It has requested replies on the particular issues arising from the 1 January 1996 change by the end of August. I shall then consider what further action, if any, is appropriate.
§ Mr. WintertonTo ask the Chancellor of the Exchequer if he will identify those sections of the European directives which have led to the promotion of the Value Added Tax (Tour Operators) (Amendment) Order. [32882]
§ Mr. Heathcoat-AmoryThe relevant EC legislation is article 26 of council directive 77/388/EEC—the Sixth VAT Directive.
§ Mr. WintertonTo ask the Chancellor of the Exchequer what will be the net cost to the United Kingdom travel industry of the proposed implementation from 1 January 1996 of the Value Added Tax (Tour Operators) (Amendment) Order; if that order has yet been subject to a compliance cost assessment; and if he will make a statement. [32880]
§ Mr. Heathcoat-AmoryThe increase in the total VAT due to the Exchequer as a consequence of the proposed implementation of the Value Added Tax (Tour Operators) (Amendment) Order 1995 is estimated at between £10 million and £40 million in a full year.
The order is the subject of a compliance cost assessment, a copy of which has been placed in the Library.
§ Mr. WintertonTo ask the Chancellor of the Exchequer when he intends next to meet representatives of the Association of British Travel Agents to discuss the implications for the United Kingdom travel industry which will be caused by the implementation of the Value Added Tax (Tour Operators) (Amendment) Order. [32967]
§ Mr. Heathcoat-AmoryI have no plans for a meeting at this stage. However, Customs and Excise has begun a wide-ranging review of the tour operators' margin scheme and issues arising from the proposed implementation of the Value Added Tax (Tour Operators) (Amendment) Order 1995 will be examined as a matter of priority. Customs has issued a 311W consultation paper and offered to meet representative bodies at any mutually convenient time.
§ Mr. WintertonTo ask the Chancellor of the Exchequer if he will make a statement of his policy on the consistency of the proposed implementation of the Value Added Tax (Tour Operators) (Amendment) Order with help for small businesses. [32883]
§ Mr. Heathcoat-AmoryI recognise the concern over the position of smaller tour operators affected by the Value Added Tax (Tour Operators) (Amendment) Order 1995. Their position is being examined as a matter of priority as part of the wide-ranging review of the tour operators' margin scheme, and in full consultation with the industry.