§ Mr. Dalyellasked the Chancellor of the Exchequer what readily available statistics he has, comparing the new penny cost of £1 collected in 1970 under selective employment tax with the new penny cost of collection of £1 collected in 1973 under value added tax.
§ Mr. HigginsThe cost of collecting SET in 1970 was a little over ½ p in the pound. As I told my hon. Friend the Member for Leek (Mr. Knox) on 13th March, no accurate estimate can be made of the separate costs of collecting value added tax and other customs and excise duties.—[Vol. 852, c.343.]
§ Mr. Warrenasked the Chancellor of the Exchequer why computer machine time imported by telephone link from the United States of America is free of value added tax, when the same computer 180W machine time obtained from a United Kingdom source is taxed.
§ Mr. HigginsThe supply of computer machine time is a supply of a service and is liable to VAT if the supply is made in the United Kingdom. If the computer is located outside the United Kingdom, the place of supply of the service is determined by reference to Section 8 (4) of the Finance Act 1972, and if the supply falls to be treated as not supplied in the United Kingdom it is not liable to VAT
§ Mr. Simeonsasked the Chancellor of the Exchequer why value added tax on motor cars is charged on a price which includes the car tax already paid, in view of the fact that this practice appears to result in an excessive charge of value added tax.
§ Mr. HigginsIt is normal to charge value added tax on a price which includes any excise taxes or customs duties previously paid. This is the case with other items such as tobacco and alcoholic drinks. The rate of car tax, like the rates of excise or customs revenue duties on other items, has been fixed at a level which takes into account the fact that VAT will be charged on it. In fact the total amount of car tax and VAT is less than the purchase tax which these two taxes replace.