Value Added Tax

HC Deb 24 October 1972 vol 843 cc209-12W

19. Mr. Carter-Jones

asked the Chancellor of the Exchequer what representations he has received from charitable organisations regarding the effect of value added tax on the employment of some professional paid staff; what estimate has been made of the extra burden which will fall upon honorary officers of such charities; and if he will make a statement.

Mr. Higgins

Under the arrangements in the Finance Act, most charities will be exempt and will therefore have no accounting obligations for VAT purposes.

Some charitable organisations which will be registered for VAT have expressed the view that the tax will increase the work of administering their charities with consequent pressure on professional staff. The tax has, however, been devised to operate as simply as possible and such charities should find little difficulty in adapting their accounting systems to meet VAT requirements. I do not expect any significant long-term burden on professional staff or honorary officers.

25. Mr. R. C. Mitchell

asked the Chancellor of the Exchequer what representations he has received concerning the incidence of value added tax dealers in second-hand goods.

Mr. Higgins

We have received a number of representations, including a recent one from the hon. Member.

26. Mr. Leonard

asked the Chancellor of the Exchequer whether he will consider proposing exemption of organised holiday visits for handicapped people from value added tax.

Mr. Higgins

Holiday accommodation will normally be within the scope of the tax, but passenger transport will, in general, be zero-rated.

28. Sir G. de Freitas

asked the Chancellor of the Exchequer whether, in the interests of the health of growing children, he has now decided that children's shoes shall have a zero or reduced value added tax rating.

Mr. Higgins

My right hon. Friend has set up a committee to inquire into the question of children's footwear and foot health. He hopes to receive its report in good time for any consequential decisions to be taken before VAT comes into operation.

29. Mr. Leadbitter

asked the Chancellor of the Exchequer to what extent he is advising the retail trade of the effects of value added tax; what representations he has had from the trade; and if he will make a statement.

Mr. Higgins

Retailers have been and will continue to be given special attention in the VAT publicity. This includes a booklet on "Special schemes for retailers" that has been widely distributed. Representations on a number of topics have been made by the trade, and all have been or are being fully considered.

Mr. Bishop

asked the Chancellor of the Exchequer how many charities have individually or collectively made representations to him about the possible effects of the imposition of value added tax on their organisations; and what replies he has sent.

Mr. Higgins

Only a small proportion of all charities have made individual representations. Most of these have been by letter. A few of the larger charities, and also the Churches' Main Committee and the National Council of Social Service, which represent various charities, have had discussions with the Customs and Excise. In a number of cases, misunderstandings of the working of the tax have already been cleared up to the satisfaction of the charities. In others, the charities have been informed that their views will be reported in the review which is being carried out by the Customs and Excise following the invitation which my right hon. Friend extended to those charities which felt they would be seriously affected as a result of all the tax changes in the Budget, during the Report stage debate on the Finance Bill. —[Vol. 840, c. 1693–4.]

Mr. Carter-Jones

asked the Chancellor of the Exchequer what representations he has received regarding anomalies caused by the implementation of value added tax on aids and equipment for disabled people; if he will inquire into such anomalies for aids for disabled people; and if he will make a statement.

Mr. Higgins

The subject of value added tax and aids and equipment for the disabled was debated during the Committee and Report stages of the Finance Bill, and my right hon. Friend has received little correspondence subsequently. As was explained during the debate, such aids and equipment will in practice be relieved from value added tax on a very wide scale.

Mr. Bishop

asked the Chancellor of the Exchequer to what extent motor insurance premiums will be increased by value added tax.

Mr. Higgins

Changes in premiums are a matter for the individual insurers concerned. Any alteration due to the reform of indirect taxation will need to take into account not only the introduction of VAT but also the abolition of SET and Purchase Tax.

Mr. Rose

asked the Chancellor of the Exchequer how many civil servants will be employed in collecting tax on fees paid out of legal aid and public funds and returned to the Exchequer as value added tax.

Mr. Higgins

Information is not available on which to base an estimate.

Mr. Rose

asked the Chancellor of the Exchequer whether he will take steps to avoid the unnecessary waste involved in collecting value added tax on fees paid out of the Exchequer in order to return them to the Exchequer.

Mr. Higgins

I do not accept that any unnecessary work will be involved.