Mrs. Jagerasked the Chancellor of the Exchequer why VAT is chargeable on the repair and restoration of buildings, but not on new building; and whether he will give consideration to relieving from VAT work of preservation, especially of old and historic buildings.
§ Mr. Robert SheldonVAT is charged at the standard rate of 8 per cent. on repair and maintenance work partly for revenue reasons and partly because of the difficulties of distinguishing essential repairs from the more discretionary type of expenditure on redecoration and other routine renewals. Relief across the board in this area could cost up to £125 million in a full year. I have noted my hon. Friend's suggestion for relieving historic building repairs, but she will be aware of the considerable assistance which is already given in the for mof historic building grants.
§ Mr. Bakerasked the Chancellor of the Exchequer whether he will estimate the amount of value added tax paid by the average family on (a) half average earnings, (b) average earnings and (c) twice average earnings.
§ Mr. Denzil Davies, pursuant to his reply [Official Report, 5 March 1979; Vol. 963, c. 563], gave the following information:
Analyses of the incidence of indirect taxes and social benefits are made annually and published in "Economic Trends" of which copies are available in the Library. The analysis for 1979 was published in January 1979. It is estimated that the amount of VAT paid in 1977 by an average household with earnings and additional benefits of about £2,340, £4,680 and £9,360 per year was about £65, £130 and £230 respectively.