§ Mr. Thomas Coxasked the Chancellor of the Exchequer what is the policy of the Government as to implementing the recommendations of the Goodman committee on value added tax.
§ Mr. Peter ReesThe Government are considering the Goodman report and will need to look very carefully at the implications of these particular recommendations.
§ Mr. Nicholas Bakerasked the Chancellor of the Exchequer what steps he is taking to expedite repayment of value added tax following the settlement of the industrial dispute at the value added tax headquarters at Southend and to pay interest on delayed repayments of amounts due to taxpayers.
§ Mr. Peter ReesThe normal processing of the 400,000 VAT repayment claims which accumulated with Customs and Excise while the computers at Southend
128Wtotal amount of sales of public sector debt to the non-bank public in each of the last three available financial years.
§ Mr. LawsonThe information is as follows:
were shut down by industrial action from 23 February to 15 May was completed by the Department on 31 May. The great majority of the claims were cleared for payment by credit transfer through the banks and National Giro or by payable orders.
Some thousands of claims were rejected by the normal computer validity checks or found to be unsatisfactory on manual scrutiny. These claims have necessarily been subject to some further delay but Customs and Excise is endeavouring to keep this to the minimum.
There is no provision in law for the charging of interest on overdue VAT or for the payment of interest on delayed repayments of VAT.
§ Mr. Morganasked the Chancellor of the Exchequer what steps he proposes to take to expedite repayments which are already overdue of VAT due to taxpayers.
§ Mr. Peter ReesThe normal processing of the 400,000 VAT repayment claims which accumulated with Customs and Excise while the computers at Southend were shut down by industrial action from 23 February to 15 May was completed the Department on 31 May. The great majority of the claims were cleared for payment by credit transfer through the banks and National Giro or by payable orders.
Some thousands of claims were rejected by the normal computer validity checks or found to be unsatisfactory on manual scrutiny. These claims have necessarily been subject to some further delay but Customs and Excise is endeavouring to keep this to the minimum.
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§ Mr. Warrenasked the Chancellor of the Exchequer what is the annual cost to his Department of collecting value added tax; and what is the total sum which was collected in the last financial year.
§ Mr. Peter ReesIt is provisionally estimated that the total cost including relevant overheads of administering VAT in 1978–79 was about £95 million. Net receipts were £4,900 million (provisional).
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer what is his estimate of the effect on the retail price index and on the weekly expenditure of a family of two adults and two children of increasing the lower rate of value added tax to 10 per cent., to 12 per cent. and to 14 per cent.
§ Mr. Peter ReesIt is estimated that the retail price index would be increased by about 1 per cent.; 2 per cent. and 3 per cent., respectively.
The increased weekly expenditure by a family with an average income of about £90 per week would be about 75p, £1.50 and £2.20 per week respectively.
§ Mr. Fieldasked the Chancellor of the Exchequer what is his estimate of the amount of unpaid value added tax for each year since the introduction of the tax.
§ Mr. Peter ReesAt 31 December 1978 the amounts of VAT due to the Exchequer but outstanding—including amounts due from persons who were insolvent or missing—for each year since the inception of the tax were:
Financial Year and Amount (£ millions) 1973–74 1.3 1974–75 6.5 1975–76 11.1 1976–77 16.2 1977–78 30.7
§ Mr. Dewarasked the Chancellor of the Exchequer if he will estimate the impact on the cost of living of raising the level of value added tax to 10 per cent. and 12½ per cent., respectively; and what is the current yield of value added tax in a full financial year and the additional revenue which would arise from an increase to 10 per cent. and 12½ per cent. respectively.
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§ Mr. Peter ReesIncreasing the standard rate of VAT to 10 per cent. and 12½ per cent. would result in additional expenditure of about 75 pence and £1.65 per week for a family with average earnings and benefits of about £90 per week.
Net receipts of VAT in the financial year 1978–79 were £4,900 million—provisional.
It is estimated that at 1978–79 prices and expenditure the additional revenue would be about £900 million and £2,000 million respectively in a full year.
§ Mr. Meacherasked the Chancellor of the Exchequer what would be the gain in revenue from a 1 per cent. increase in VAT.
§ Mr. Peter Rees, pursuant to his reply [Official Report, 25 May 1979; Vol. 967, c. 302–3], gave the following answer:
If the standard and higher rates of VAT were raised by 1 per cent. the gain in revenue would be about £500 million in a full year.
§ Mr. Michael Morrisasked the Chancellor of the Exchequer how much VAT revenue was raised from theatres, concert halls and cinemas for the latest 12 months available.
§ Mr. Peter Reespursuant to his reply [Official Report, 24 May 1979; Vol. 967, c. 194], gave the following answer:
The amount of VAT charged in 1977–78 by businesses registered for VAT as cinemas, theatres, music halls, etc. suppliers of radio and TV services—other than relay services—and the services of film and recording studios, etc. was £54.5 million.