§ Mr. Thompsonasked the Chancellor of the Exchequer what will be the cost to the Exchequer in revenue forgone by allowing all value added tax payers exemption on the first part of their turnover to the level at which value added tax becomes payable.
§ Mr. Peter ReesI shall let the hon. Friend have a reply as soon as possible.
§ Mr. Greenwayasked the Chancellor of the Exchequer what would be the cost to the Exchequer of reducing value added tax of British thoroughbred and other horses to zero rating in line with the practice of France, Ireland and other countries; and if he will make a statement.
§ Mr. Peter Rees:It is estimated that the loss of revenue might be of the order of £5 million in a full year if supplies of British thoroughbred and other horses were zero rated for value added tax. However, neither France nor Ireland apply zero rating—the former applies value added tax to the carcase value and in Ireland supplies of thoroughbred horses 534W are exempt. This latter exemption is allowed initially until the end of 1982 as a transitional arrangement under the Sixth Directive. The French practice is considered by the United Kingdom to be in breach of the directive's terms. I made the Government's attitude in these matters clear in my reply of 17 May to a question by my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies).—[Vol. 967, c. 4–5.]
§ Mr. Greenwayasked the Chancellor of the Exchequer what would be the cost to the Exchequer of reducing to zero the value added tax paid on school journeys of Church schools to bring them in line with schools in the maintained sector; and if he will make a statement.
§ Mr. Peter ReesThere is no disparity of treatment for value added tax purposes between school journeys organised by Church schools and by other schools.
§ Mr. Welshasked the Chancellor of the Exchequer what was the amount of value added tax paid by charities in the last financial year; what is his estimate of the amount charities will have to pay in value added tax in a full year at the new rate announced in the Budget; and what effect the increase in value added tax will have on the total amount of value added tax paid by charities.
§ Mr. Peter ReesI am afraid that separate information for businesses registered as charities is not available, but in 1978–79 net payments of VAT from welfare and charitable services, who are classified together for VAT, were about £1 million.
It is estimated that with a rate of 15 per cent. net payments would be about £2¼ million in a full year. This is about £1 million more than if the rates of VAT had not been changed by the Budget.
§ Mr. Alan Clarkasked the Chancellor of the Exchequer when he expects to implement the recommendation of the Goodman committee that all charities should be free to reclaim value added tax in excess of £25 a year on all their expenses.
§ Mr. Peter ReesI refer my hon. Friend to the reply which I gave to the hon. Member for Tooting (Mr. Cox) on 11 June.