48. Mr. Wellsasked the Chancellor of the Exchequer why a light aircraft hired to a pilot's licence holder carries VAT at 20 per cent., whereas the same aircraft hired to a non-licence holder, but piloted without reward by a qualified pilot, carries eight per cent.
§ Mr. Robert SheldonUnder Section 5(2) of the Finance Act 1972 a supply of goods for VAT purposes includes the letting of goods on hire. Accordingly, VAT at the 25 per cent.—not 20 per cent.—rate is chargeable on the hire of a light aircraft whether it is hired by the holder 487W of a pilot's licence or by anybody else. However, the hire of an aircraft together with the services of a pilot for the purposes of transport, or with the services of an accompanying instructor for the purpose of a flying lesson, is a supply of services which is outside the scope of the higher rate charge and remains chargeable at the 8 per cent. standard rate.
§ Mr. John Evansasked the Chancellor of the Exchequer what rate of VAT applies to distress alarms and door entry systems for the handicapped.
§ Mr. Robert Sheldon25 per cent. But if these items are supplied for the benefit of a handicapped person by a local authority under the Chronically Sick and Disabled Persons Act 1970, they are, in effect, free of VAT.
§ Mr. Ronald Atkinsasked the Chancellor of the Exchequer how the net payment of VAT on petrol by the private motorist compares with that of motorists in registered businesses.
§ Mr. Robert SheldonPersons registered for VAT are able to reclaim the VAT charged on their purchases of petrol for business use, subject to the normal rules. For the estimate of the net yield of VAT on petrol, I would refer my hon. Friend to the reply given to the hon. Member for Warwick and Leamington (Mr. Smith) on 21st April; most of this net yield is derived from purchases by private motorists and other unregistered persons.
§ Mr. Woofasked the Chancellor of the Exchequer if he is satisfied with the operation of VAT on certain items of food; and if he will make a statement.
§ Mr. Robert SheldonI am satisfied, but I keep the scope of the tax under review.
§ Mr. Woofasked the Chancellor of the Exchequer if he is satisfied with the cooperation and efficiency of traders in the operation of VAT.
§ Mr. Robert SheldonIn general, well satisfied. My right hon. Friend acknowledged in his Budget speech the success with which small businesses, in particular, have adapted themselves to VAT, and I am glad to take this opportunity of488W confirming our appreciation of their co-operation.
§ Mr. Woofasked the Chancellor of the Exchequer if he will undertake to publish widely all future VAT price changes in the national Press and other media.
§ Mr. Robert SheldonDetails of VAT changes are always widely publicised, but it would not be practicable to publish details of consequential price changes for every different line of goods or type of service that may be affected.
Mr. Wellsasked the Chancellor of the Exchequer if, in view of the risk to safety caused by charging 25 per cent. VAT on radio maintenance and repair as applied to light aircraft, he will reconsider the increased charge on such work.
§ Mr. Robert SheldonI have noted the hon. Member's suggestion.