§ Mr. Farrasked the Chancellor of the Exchequer if, in view of the fact that the European Economic Community countries have failed to harmonise their method of collecting value added tax on imports by the proposed date of January 1984, he will urgently review the British system of collecting value added tax on imports with a view to bringing it into line with the United Kingdom's European Economic Community partners.
§ Mr. Hayhoe[pursuant to his reply, 19 December 1983]: The draft directive making it obligatory for EC member states to have a system of postponed accounting for VAT on imports from other member states is still before the Council of Ministers. Postponed accounting already operates in the United Kingdom, the Benelux countries and, to a limited extent, in Ireland. There are no proposals for an immediate review of the United Kingdom system.
§ Mr. Farrasked the Chancellor of the Exchequer if, in view of the fact that the postponed payment system of collecting value added tax on imports disadvantages home manufacturers as compared with importers, he will take steps to amend the system.
§ Mr. Hayhoe[pursuant to his reply, 19 December 1983]: The Government carefully considered the postponed accounting system for VAT on imports in 1980 but concluded that it did not benefit imports at the expense of United Kingdom goods.
§ Mr. Farrasked the Chancellor of the Exchequer if he will estimate the once for all boost to Government revenue by changing from the current method of collecting value added tax on imports to the system practised by the other member states of the European Economic Community.
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§ Mr. Hayhoe[pursuant to his reply, 19 December 1983]: It is very difficult to make a realistic estimate of the effect of such a change, because much would depend on how traders reacted. But within very broad margins, the once-for-all benefit in current terms could be of the order of £1,000 million, much of which would fall on United Kingdom manufacturing industry.