§ Mr. Carter-Jonesasked the Chancellor of the Exchequer if he will give instructions to Customs and Excise officers handling value added tax to provide zero rating for distress alarms fitted to the homes of disabled and elderly persons; and if he will make a statement regarding the present value-added tax position.
§ Mr. Robert SheldonThe application of VAT to distress alarms is under review but I have no power to override the existing legal provisions. At present, since distress alarms are goods of a kind suitable for domestic use which are operated by electricity, they are chargeable at the 25 per cent. rate of VAT under Group 1, Item 1 of Schedule 7 to the Finance (No. 2) Act 1975. Where, however, a distress alarm system is installed as a fixture in a purpose-built home for elderly or infirm people, both the installation and the equipment are zero rated under Group 8 of Schedule 4 to the Finance Act 1972; and, if a distress alarm is supplied for the benefit of a handicapped person by a local authority under the Chronically Sick and Disabled Persons Act 1970 it is in effect free of VAT.