§ Mr. Parkinsonasked the Chancellor of the Exchequer whether value added tax at 8 per cent. is charged on the statutory fee of £50 payable on the formation of a company.
§ Mr. Trotterasked the Chancellor of the Exchequer why VAT is charged on the costs of forming a limited company; whether the charge is applied to the £50 Government duty payable by a new company; whether the ruling in this respect has been changed and, if so, with effect from that date; whether the VAT payable on a company formation is regarded as a pre-incorporation expense not reclaimable by the company; and if he will give examples of other Government duties on which VAT is payable.
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 28th October 1975; Vol. 898, c. 434–5], gave the following information:
The service rendered by a solicitor or accountant in forming a company to a client's instructions is subject to VAT 535W under Sections 1 and 5(8) of the Finance Act 1972. However, stamp duty paid on the client's behalf in such a case is regarded as a disbursement, on which VAT is not payable.
When a company has already been formed and is being sold as an entity at a single "all-in" price VAT is payable on the total price. There has been no new ruling, but in some cases the correct procedure has not been followed and that is now being put right.
The reclaiming of VAT on expenses incurred in forming a company may depend on the date when the company is registered for VAT and the dates when the VAT is charged. I shall be glad to look into any particular case the hon. Member has in mind.
VAT is chargeable by reference to the consideration for a supply of goods or services, including any elements of duty or tax which the consideration may cover. For example, the value for VAT purposes of supplies of petrol or alcoholic drinks includes the duty payable on them.
UNEMPLOYED AND NOTIFIED UNFILLED VACANCIES AT SEPTEMBER 1975—GREAT BRITAIN Unemployed and registered at Employment Offices Unfilled Vacancies at Employment Offices Males Females Males Females Managerial and professional 51,489 14,600 12,475 5,765 Clerical and related 76,294 70,924 5,075 14,186 Other non-manual occupations 19,248 22,523 8,322 4,118 Craft and similar occupations including foremen, in processing, production, repairing etc. 112,512 5,270 26,771 6,605 General labourers 377,729 65,968 4,153 2,164 Other manual occupations 195,074 44,253 25,273 25,879