§ Mr. Lathamasked the Chancellor of the Exchquer why he has reclassified the construction of a road on the same ground as the previous road as attracting the standard rate of value added tax; and if he will return to the previous interpretation.
§ Mr. Hayhoe[pursuant to his reply, 10 July 1984]: The intention of my right hon. Friend's Budget proposal was to extend value added tax from repairs and maintenance to all alterations to buildings and to civil engineering works. Zero-rating is continued for new construction, but the Finance Bill specified that this term is not to include the reconstruction, alteration or enlargement of existing work. The work referred to by my hon. Friend would constitute reconstruction, and I am afraid I could not agree to reverting to the pre-Budget position for road works.