§ Mr. Deakinsasked the Chancellor of the Exchequer if he will set out the detailed calculations which produced a figure of 2,680.7 million European currency units for the 1982 United Kingdom contribution to the European Community own resources in respect of value added tax; why this figure was more than 50 per cent. higher than that in 1981; and if he will make a statement.
§ Mr. HayhoeUnited Kingdom contribution to EC VAT own resources are assessed by applying the EC VAT rate to a harmonised VAT expenditure base. This United Kingdom expenditure base is calculated using:
- a. Net receipts of domestic VAT, divided by
- b. A weighted average of the VAT rates of zero rate and 15 per cent, for which 1982 produced an average of 9.2 per cent.
- c. This base is then adjusted to allow for those derogations under the sixth VAT directive operated by the United Kingdom.
United Kingdom sterling contributions for 1981 were £1,060 million, compared with £1,554 million for 1982 giving an increase of 46.6 per cent. This reflected increases in consumer expenditure over the period of 27.7 per cent.; delayed collection of some VAT from 1981 to 1982 as a result of industrial action by some civil servants in 1981; and an increase in the EC VAT rate from 0.8667 per cent. to 0.9248 per cent.