§ Sir Timothy Kitsonasked the Chancellor of the Exchequer what action he has taken vis-à-vis the EEC Commission in order to secure an end to the value added tax treatment of bloodstock and racing in France and the Republic of Ireland which operates to the detriment of United Kingdom interests; whether the Government intend to allow any further extension of the period during which racehorses can be imported for training and racing into the United Kingdom without payment of value added tax; and if he will make a statement.
§ Mr. Peter ReesMy right hon. and learned Friend the Chancellor of the Exchequer wrote to Commissioner Burke on 7 March. He told him that he was disturbed that no action appeared to have been taken under article 169 of the Treaty of Rome to open proceedings against the French and Irish Governments. I followed up this complaint at a meeting which I had with Commissioner Burke on 14 March. Commissioner Burke informed me that the Commission had instituted fact-finding inquiries with regard to training services in France, Ireland and the United Kingdom and that he expected the Commission to be in a position to take a final decision on whether to authorise proceedings at a meeting around the end of April.
Although the Government will continue to press the Commission to take action to end the practices which are not in conformity with the sixth Council directive on value added tax, it would be unrealistic to count on a very early end to those practices. The Government have therefore been considering what action they themselves can take which would be consistent with the provisions of the directive but which would lessen the damage done to the United Kingdom bloodstock interests.
I have today authorised the Commissioners of Customs and Excise to extend by one year the temporary importation facility for racehorses owned by overseas residents. The effect of this concession will 247W be that overseas owners will be able to have their horses trained and raced in the United Kingdom for two full racing seasons without incurring any liability for value added tax at importation provided that the horses remain in the same ownership and are re-exported at the end of the two-year period. For the purposes of the conditions for the export zero rating relief, there will be a similar extension in the period of racing use of a horse purchased in the United Kingdom by an overseas resident prior to exportation. The Commissioners of Customs and Excise will be in touch with the Jockey Club and the Horseracing Advisory Council about the detailed application of the concessions.