§ Mr. Kelleyasked the Chancellor of the Exchequer what has been the increase in the cost of collecting revenue since the introduction of value added tax.
§ Dr. GilbertThe cost of administering the Customs and Excise Service—the Department responsible for collecting VAT—is estimated to have been £85 million in 1973–74 as against £68 million in 1972–73. The difference between the two is, of course, influenced by factors other than the introduction of VAT; and there is an element in the figure for 1972–73 for the increase in staff preparatory to the introduction of VAT.
§ Mr. George Rodgersasked the Chancellor of the Exchequer what proportion of the total yield produced by value added tax is accounted for by administrative costs.
§ Dr. GilbertIn the financial year 1973–74 the administrative cost of VAT was 2.4 per cent. of receipts. In the first year receipts were much less than the yield in a full year because the tax is collected in arrears and because they were reduced by the relief for tax- and duty-paid stocks.