HC Deb 13 December 1983 vol 50 c396W
Mr. Deakins

asked 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. Hayhoe

United 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:

  1. a. Net receipts of domestic VAT, divided by
  2. 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.
  3. 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.