HC Deb 11 June 1984 vol 61 cc334-5W
Mr. Heddle

asked the Chancellor of the Exchequer if he will indicate (a) the anticipated costs of collecting the gross revenue of value added tax on improvement and renovation building works and (b) the anticipated amount of additional mortgage interest tax relief likely to be claimed following the implementation of his Budget proposals on this matter.

Mr. Hayhoe

(a) No reliable information is available about the cost of administration related to different categories of businesses, but the average cost of collecting VAT from all businesses in 1982–83 was about 1.1 pence for every £1 of net VAT revenue. This is expected to change very little in 1984–85.

(b) The amount of additional mortgage interest tax relief will depend upon the extent to which this work will be financed from loans which qualify for that relief. As I informed my hon. Friend in my reply to him on 24 May, the overall effect on tax revenue of changes in mortgage interest tax relief, taking account of the associated changes in the tax liabilities of the lenders on their incomes, is estimated to be broadly neutral.

Dr. Twinn

asked the Chancellor of the Exchequer whether the public sector borrowing requirement estimate of increased revenue that is likely to result in 1984–85 from the imposition of the value added tax on building alterations takes into account the additional payments of value added tax which will be made by central Government Departments on their building programmes in 1984–85.

Mr. Hayhoe

The estimated net additional revenue of £250 million in 1984–85 from withdrawing the zero rate of VAT from building alterations excludes additional VAT payments by central Government Departments.

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