§ Ms PrimaroloTo ask the Chancellor of the Exchequer (1) if he will estimate the impact on VAT revenues of the recent reductions in(a) value added tax staff in his Department and (b) the number of assurance visits made by value added tax staff; [29517]
(2) if he will estimate the percentage reduction which will take place in the number of standard VAT inspections, following staff reductions in Customs and Excise resulting from the fundamental expenditure review. [29522]
§ Mr. Heathcoat-Amory[holding answers 15 May 1996]: Customs and Excise aims to improve its effectiveness by replacing some VAT visits with alternative means of gaining assurance and targeting the remaining visits better in relation to risks. This will enable it to reduce staffing levels while maintaining or improving outputs. The precise reduction in visiting which can be achieved will depend on the outcome of trials, which are currently taking place and will be evaluated during the coming year.
We do not expect the changes made this year to affect VAT revenues.
§ Ms PrimaroloTo ask the Chancellor of the Exchequer if he will list the latest available figures for(a) under-declarations and (b) over-declarations of tax detected by value added tax assurance officers. [29518]
§ Mr. Heathcoat-Amory[holding answer 15 May 1996]: The latest available full-year figures are for 1994–95 and total (a) £3,286 million in under-declarations and (b) £1,146 million in over-declarations identified by officers.
568W
§ Ms PrimaroloTo ask the Chancellor of the Exchequer if he will estimate the additional revenue collected annually as a result of assurance visits by VAT officers. [29523]
§ Mr. Heathcoat-Amory[holding answer 15 May 1996]: The additional revenue identified by officers in 1994–95 was £2,140 million.
§ Ms PrimaroloTo ask the Chancellor of the Exchequer if he will make it a charter commitment for a VAT officer to visit all newly registered businesses within three years of registration. [29524]
§ Mr. Heathcoat-Amory[holding answer 15 May 1996]: Customs has recently published a revised charter standard, which includes a commitment to offer to every newly registering business a choice of options to learn about how VAT works.
This provides timely advice, tailored to business needs, and replaces the commitment to visit within three years.
§ Ms PrimaroloTo ask the Chancellor of the Exchequer if he will estimate the annual amount of VAT evaded or undeclared; and if he will make a statement. [29525]
§ Mr. Heathcoat-Amory[holding answer 15 May 1996]: In an average year, HM Customs and Excise investigates about 1,100 cases for fraudulent evasion of VAT, involving total arrears of approximately £60 million. About 1,502 are dealt with through criminal procedures, and about 950 are dealt with using the civil investigation route. Financial penalties of approximately £8 million per annum are applied. About 100 custodial years per annum are imposed by the courts.
It is not possible to quantify the level of fraud that goes undetected, but by its nature the detection of a fraud prevents further evasion. We estimate the total annual amount of evasion prevented as a result of the investigation effort to be in the region of £200 million, including arrears.
In addition, about £2.5 billion of net under declarations is identified, mainly through risk-based auditing of businesses' accounts.
§ Ms PrimaroloTo ask the Chancellor of the Exchequer how much VAT has been reclaimed by people leaving the country who have bought goods in the UK, in each of the last five years. [29526]
§ Mr. Heathcoat-Amory[holding answer 15 May 1996]: No records are maintained of tax-free sales to entitled persons. Doing so would have resource implications for Customs and Excise and would impose an unacceptable burden on retailers who would be required to keep additional records and submit returns.