§ Miss Richardsonasked the Chancellor of the Exchequer (1) what will be the effect of the increase in VAT on the purchasing power of a couple with earnings below the tax threshold before the 288W Budget and with (a) one and two children aged under 11 years and (b) one and two teenage children requiring non-zero-rated clothing;
(2) what will be the effect of the increase in VAT on the purchasing power of a couple paying tax at the 25 p cent. 289W rate before the Budget and with (a) one and two children aged under 11 years and (b) one and two teenage children requiring non-zero-rated clothing.
§ Mr. Peter ReesI regret that this information is not available.
Information about the expenditure patterns of different family income levels is contained in the family expenditure survery (FES), the most recent of which relates to 1977. However, the FES sample is too small to distinguish accurately between low-income households with children under 11 and those with teenage children. Furthermore, the FES classifies family expenditure, not according to income liable to income tax, but according to " gross normal income " which includes social security benefits. The level of benefits payable will depend on the precise level of income and a range of individual family circumstances.
It should be noted that the income tax reductions announced in my right hon. and learned Friend's Budget speech have the effect of removing some 1.3 million people from the income tax net altogether.
§ Mr. Beaumont-Darkasked the Chancellor of the Exchequer if he is satisfied that no undue harassment is carried on by the value added tax inspectorate so causing unnecessary anxiety to those under investigation.
§ Mr. Peter ReesThe small number of complaints levelled against VAT officers when compared to the number of visits made does not suggest that this is so. We have, however, undertaken to review the VAT control and enforcement powers.
§ Mr. Cryerasked the Chancellor of the Exchequer if he will place in the Library
Gross annual earnings Reduction in tax between 1977–78 and 1978–79 Additional gross income required to give that gain in net income Reduction in tax between 1978–79 and 1979–80 Additional gross income required to give that gain in net income £ £ £ £ £5,000 … … 122 182 165 236 £10,000 … … 396 672 348 497 £15,000 … … 810 2,239 1,038 1,895 £20,000 … … 1,068 4,266 1,975 4,187 £30,000 … … 1,316 7,744 4,262 10,656 £50,000 … … 1,316 7,744 8,862 22,156 The calculations of gross income use 1978–79 and proposed 1979–80 tax rates the appropriate columns.
290Wa list of all items now subject to 15 per cent. value added tax.
§ Mr. Peter ReesI refer to the answer given to the hon. Member on 20 June.
§ Mr. Blackburnasked the Chancellor of the Exchequer if he will give consideration to the zero rating for VAT purposes of specialised items of equipment for the sick and disabled donated by bona fide public subscription.
§ Mr. Peter ReesI shall let my hon. Friend have a reply as soon as possible.
§ Mr. Roy Hughesasked the Chancellor of the Exchequer in regard to VAT revenues on motor spirit, on what basis the rise in motor spirit VAT revenue was calculated, bearing in mind that the pump price has risen by 50 per cent. since last year and the rate of VAT has risen from 12½ per cent. to 15 per cent.
§ Mr. Peter Rees,pursuant to his reply [Official Report, 4 July 1979; Vol. 969, c. 613], gave the following answer:
The estimates of VAT revenue from sales of petrol which I gave to the hon. Member on 19 June were based on statistics of consumers' expenditure on petrol and oil and an assumed average price of petrol after the Budget of £1.05 a gallon. The estimate takes account of reductions in consumption as prices rise.