§ Mr. Lathamasked the Chancellor of the Exchequer what is the total sum of value added tax repaid to all benefiting taxpayers arising out of the case of Direct Cosmetics Ltd. v. Commissioner of Customs and Excise; and what is the total number of taxpayers who have so benefited.
§ Mr. BrookeSo far, a total of £4,653,383.70 VAT has been repaid to taxpayers; the total number of taxpayers benefiting is 97.
§ Mr. Lathamasked the Chancellor of the Exchequer if he will describe the obstacles which, on 14 May, Official Report, column 478, prevented the Minister of State, the hon. Member for the City of London and Westminster, South (Mr. Brooke) from estimating the cost to his 170W Department of the case of Direct Cosmetics Ltd. v. Commissioner of Customs and Excise; and when he expects this information will become available.
§ Mr. BrookeThe information is not available because legal costs which would include, for example, those incurred by the Customs Solicitor's Office are not allocated to particular cases and there would be disproportionate cost in doing so.
§ Mr. Lathamasked the Chancellor of the Exchequer if he will outline the reasons why some taxpayers affected by the Direct Cosmetics judgment, but who had refused to pay value added tax prior to April 1983, have had their assessments totally withdrawn; and why Direct Cosmetics Ltd. has only received a refund of the tax illegally charged since 1983, but not for the period prior to February) 1983.
§ Mr. BrookeIn considering claims from taxpayers for refunds of tax, Customs have restricted repayments to the commencement of the tax quarters in which one of two events occurred(a) for traders who had not previously made a formal challenge to customs' legal powers to issue notices of direction, the date when the case of Direct Cosmetics Ltd. was referred to the European Court of Justice, ie 9 November 1983; or (b) for those who had made a formal challenge, the date on which such challenge was made. Direct Cosmetics Ltd. first formally challenged Customs powers at the VAT tribunal on 28 April 1983 and its relevant tax quarter commenced on 1 February 1983. Its claim has, therefore, been met to this date. A small number of traders, however, withheld tax prior to April 1983 which was later found not to be due because of the decision in the case of Direct Cosmetics Ltd. in the European Court. Such tax cannot now be recovered and consequently assessments originally issued have been withdrawn.