§ Mr. Eggarasked the Chancellor of the Exchequer what action he proposes to take to reduce the black economy in the construction industry and other industries; and if he will make a statement.
§ Mr. HayhoeI refer my hon. Friend to my remarks in the Adjournment debate on 25 January, at columns 1305-1312. Both Revenue Departments continue to keep the methods used to counter tax evasion in the black economy in the construction and other industries under careful review.
§ Mr. Eggarasked the Chancellor of the Exchequer what representations he has received from the construction industry regarding the black economy in building work and the effect of competition within the industry of the value added tax exemption limit for small businesses; and what action he proposes to take.
§ Mr. HayhoeA total of 146 representations have been identified in the past year. They all in some way alluded to the black economy in the construction industry and a few sought to have the level of the VAT registration threshold reduced. The present VAT threshold of £19,500 excludes from registration many small traders in the construction industry, and there is no firm evidence to suggest that there is a significant number of businesses which are properly registrable but have failed to notify their liability.
§ Mr. Eggarasked the Chancellor of the Exchequer what is the estimated number of traders in the construction industry who are failing to comply with their legal obligation to be registered for value added tax with Her Majesty's Customs and Excise; and whether there is any evidence that the number of such traders is increasing.
§ Mr. HayhoeThere are no estimated figures available for the number of traders who fail to notify their liability to be registered for VAT. In a sample exercise, based on information supplied by the industry, Customs and Excise was unable to establish that out of 132 cases a single trader had failed to comply with his legal obligation.