§ Mr. BurstowTo ask the Chancellor of the Exchequer, pursuant to his answer of 19 March 1998,Official Report, column 671, concerning the VAT Tribunal and continence products, if he will list (a) the cases when VAT relief applied and (b) the cases where VAT relief did not apply. [37168]
§ Dawn Primarolo[holding answer 1 April 1998]: The VAT Tribunal in Molnlycke Ltd. examined four contracts. It decided that supplies of continence products under the contracts with Aylesbury Vale Community Health Care Trust and Chester and Halton Community NHS Trust for patients in their own homes were zero-rated. However, it ruled that supplies of those goods for residents under the contract with Westgate House Nursing Home and for the majority of patients of Edinburgh Healthcare NHS Trust were standard-rated.
§ Mr. BurstowTo ask the Chancellor of the Exchequer, pursuant to his answer of 19 March 1998,Official Report, column 671, concerning the VAT Tribunal decision in respect of continence products, for what reasons he decided to reimpose VAT in each case where the tribunal had ruled that relief should apply. [37169]
§ Dawn Primarolo[holding answer 1 April 1998]: The VAT relief for continence products was used by several NHS Trusts, which entered into contractual arrangements with a third party to gain a tax advantage. As NHS Trusts are funded for the VAT they cannot recover, the tax advantage amounted to double funding. We therefore introduced a change of law to restore the status quo.