§ Mr. Deakinsasked the Chancellor of the Exchequer what is his estimate of the yield of a 10 per cent. value added tax on the distribution costs borne by the food industry; and what effect this burden will have on the cost of food to the consumer.
§ Mr. HigginsVAT paid on the distribution costs of the food industry will be reclaimable in the case of zero-rated foods and deductible from the tax charge on other foods and will therefore not affect the cost of food to the consumer. Moreover the food distribution industry now bears a significant amount of selective employment tax which is to be abolished.
Food producers and distributors with taxable sales of less than £5,000 per annum who would otherwise be exempt from the tax may obtain repayment of tax on their purchases under the arrangements for discretionary registration.
380WOverall the effect will be a reduction in the tax on food.