§ Mr. David Howellasked the Chancellor of the Exchequer (1) whether he is aware that for purposes of Selective Employment Tax the processing of waste paper is classified as a service when undertaken by a firm specialising in this kind of activity but as manufacturing when undertaken by a paper or board mill or a subsidiary of a paper or board mill; and whether he will take steps to change this classification;
(2) why private sector waste paper processors are required to pay the Selective Employment Tax while local authorities processing waste paper are not so required.
§ Mr. TaverneWaste paper processing is dealt with for Selective Employment Tax purposes in accordance with the primary activity of the employer concerned. Subsidiary companies are separate employers for the purpose of the tax. Local authorities handle waste paper as part of their task of collecting and disposing of refuse and they receive repayment in respect of the tax they pay for their employees engaged on this work, as for most of their activities. I have no proposals to change these arrangements.
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