HL Deb 11 March 1997 vol 579 c18WA
Lord Kennet

asked Her Majesty's Government:

How the reply of Lord Mackay of Ardbrecknish (H.L. Deb., 11 February,WA 15) to the effect that the "Government … has no plans to change the current position whereby repairs to listed buildings are liable to VAT at the standard rate" accords with the statement of the Minister of State at the Department of National Heritage (Mr. Ian Sproat) on 12 December 1996 to the effect that "the VAT directive that requires repairs to be taxed at the full 17.5 per cent. is about to be reviewed"; and

Whether, if the VAT directive that requires repairs to be taxed at the full 17.5 per cent. is changed after review, they intend to make consequential changes in United Kingdom law.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)

It is the responsibility of the European Commission to review every two years, starting in 1994, the part of the VAT Sixth Directive that lists the supplies of goods and services to which a reduced rate may be applied. In principle the Commission should have undertaken a review before the end of 1996, and it was this expectation that formed the basis of Mr. Sproat's statement last December. In practice, because the Commission has committed its resources to other work and there is little pressure from member states for changes, the Commission has not undertaken such a review.

The list of goods and services in the Sixth VAT Directive to which a reduced rate may be applied already includes all building work in connection with housing. However, the Government have no plans to introduce any further reduced VAT rates other than the unique 8 per cent. for domestic fuel and power.

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