§ Mr. Banksasked the Chancellor of the Exchequer why there are different rates of VAT for burglar alarm equipment suitable for use in banks and for those suitable for domestic use.
§ Mr. Robert SheldonUnder Group 1 of Schedule 7 to the Finance (No. 2) Bill, the 25 per cent. rate of VAT applies only to goods "of a kind suitable for domestic use". Specialised systems for use in banks and other premises with high security risks are not generally regarded as being so suitable.
§ Mr. Banksasked the Chancellor of the Exchequer whether he will make a statement to clarify the varying rates of VAT on burglar alarm systems, parts, repairs, rentals and installation costs.
§ Mr. Robert SheldonBurglar alarm systems of a kind suitable for domestic use are chargeable at the 25 per cent. higher rate of VAT. Systems which are not suitable for domestic use continue to be chargeable at the 8 per cent. standard rate. However, since the zero rate takes precedence over both positive rates, the 399W first-time installation of a burglar alarm system as a fixture in the course of the construction or alteration of a building continues normally to be zero-rated under Group 8 of Schedule 4 to the Finance Act 1972.
Parts of burlar alarms are chargeable at the 25 per cent. rate, unless they are suitable for use only with those burglar alarm systems which are themselves not suitable for domestic use, or are parts of general use which are excluded from the 25 per cent. rate. Repairs of burglar alarm equipment are chargeable at the 25 per cent. rate if the system is of a kind suitable for domestic use. Repairs of other systems are chargeable at 8 per cent.
Rentals of burglar alarm systems are chargeable at the appropriate positive rate, depending on whether or not the system is of a kind suitable for domestic use. However a first-year rental charge which is paid on the occasion of the first time installation of a system is regarded as zero-rated as part of the installation charge.
§ Mr. Banksasked the Chancellor of the Exchequer what is meant by burglar alarm equipment "suitable for domestic use"; and whether such systems may be used in commercial and industrial premises.
§ Mr. Robert SheldonBurglar alarm systems are regarded as suitable for domestic use if they are of a kind installed in private houses or similar premises. Systems which are suitable for domestic use attract the 25 per cent. rate when installed in commercial or industrial premises, but input tax on supplies of goods or services to a taxable person for the purpose of his business is deductible subject to the normal VAT rules.
§ Mr. Banksasked the Chancellor of the Exchequer what rate of VAT is payable on the purchase of burglar alarm parts (a) direct from a manufacturer and (b) from a retail outlet.
§ Mr. Robert SheldonGenerally 25 per cent. in either case. However, the 8 per cent. standard rate continues to apply to any parts suitable for use only with specialised burglar alarm systems which are themselves not suitable for domestic use.
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§ Mr. Banksasked the Chancellor of the Exchequer what is the rate of VAT on annual rental charges for burglar alarm installations.
§ Mr. Robert SheldonRentals of burglar alarm systems are chargeable at the appropriate positive rate, depending on whether or not the system is of a kind suitable for domestic use. However, any first-year rental charge which is paid on the occasion of the first-time installation of a burglar alarm system as a fixture in the course of the construction or alteration of a building continues normally to be zero rated under Group 8 of Schedule 4 to the Finance Act 1972.
§ Mr. Banksasked the Chancellor of the Exchequer what rate of VAT applies to the parts used in extending a burglar alarm system, irrespective of where the system is installed.
§ Mr. Robert SheldonMost parts of burglar alarm systems are chargeable at 25 per cent. However, the 8 per cent. standard rate continues to apply to any parts suitable for use only with specialised burglar alarm systems which are themselves not suitable for domestic use, and—if they are used to extend such specialised systems—to any parts of general use which are excluded from the 25 per cent. rate.
§ Mr. Banksasked the Chancellor of the Exchequer whether the VAT zero rate applies to professionally installed burglar alarm systems.
§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 14th July 1975; Vol. 895, c. 348–9.], gave the following information:
Yes, the first-time installation of a burglar alarm system as a fixture in the course of the construction or alteration of a building is normally zero rated under Group 8 of Schedule 4 to the Finance Act 1972.
§ Mr. Banksasked the Chancellor of the Exchequer why he decided to impose the 25 per cent. VAT rating on service charges and repairs to existing burglar alarm systems and to zero rate the first year's service charge on new installations.
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§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 14th July 1975; Vol. 895, c. 349.], gave the following information:
In deciding the coverage of the 25 per cent. rate of VAT my right hon. Friend tried as far as possible to impose the extra burden on those best able to bear it. It was, however, necessary to apply the 25 per cent. rate to some goods used in many homes, including all but the most basic domestic electrical equipment, and to the servicing and repair of goods which are themselves chargeable at 25 per cent.
However, since the zero rate takes precedence over the positive rates of VAT, any first year rental charge which is paid on the occasion of the first-time installation of a burglar alarm system as a fixture in the course of the construction or alteration of a building continues normally to be zero-rated under Group 8 of Schedule 4 to the Finance Act 1972.
§ Mr. Banksasked the Chancellor of the Exchequer what is the rate of VAT for repairs to burglar alarm systems.
§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 14th July 1975; Vol. 895, c. 349.], gave the following information:
Twenty-five per cent. if the system is of a kind suitable for domestic use, 8 per cent. in other cases.
§ Mr. Banksasked the Chancellor of the Exchequer why he considered it appropriate that varying rates of VAT should be applied to burglar alarms.
§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 14th July 1975, Vol. 895, c. 349], gave the following information:
Under Group 1 of Schedule 7 to the Finance (No. 2) Bill the 25 per cent. rate of VAT applies only to goods of a kind suitable for domestic use. Goods which are not so suitable remain chargable at the 8 per cent. standard rate. Moreover, since the zero rate takes precedence over the positive rates of VAT, the first-time installation of a burglar alarm system as a fixture in the course of the construction or alteration of a building continues normally to be zero-rated under Group 8 of Schedule 4 to the Finance Act 1972.