§ Mr. Austin Mitchellasked the Chancellor of the Exchequer whether he has any means of preventing, employers from getting a tax credit on value added tax paid 203W on petrol used for private purposes in company owned cars; and if, to prevent abuse, he will replace the value added tax by an equivalent increase in excise duty.
§ Mr. Peter ReesEmployers are allowed to take credit for value added tax on all the petrol they buy for use for the purpose of their business. The independent VAT tribunal decided in the case of Pye of Cambridge Ltd. v. Commissioners of Customs an.' Excise (1977 VATTR 33) that this included petrol bought for the private use of an employee.
Supplies of petrol to employees for private use are, however, chargeable with value added tax on no less than the cost of the petrol supplied. The employer must therefore account for an amount of tax which is at least equal to the tax credit he obtained on buying the petrol.
As to the last part of the question, I have noted the hon. Member's suggestion.
§ Mr. Dickensasked the Chancellor of the Exchequer if he will take steps to exempt all horse show entry fees from value added tax; and if he will also take steps to exempt from value added tax horse sales and allow this to be attributed only to the profit on the sale of a horse.
§ Mr. Peter Rees[pursuant to his reply, 4 December 1980]: The position on the liability to VAT of entry fees to horse shows which are competitive events is the same as that for fishing contests, which I explained in reply to a question by the hon. Member for Newcastle-under-Lyme (Mr. Golding) on 13 November—[Vol. 992, c. 435]. As to the second part of the question, I have noted my hon. Friend's suggestion and will Dear it in mind.