§ Mr. McCrindleTo ask the Chancellor of the Exchequer what assessment he has made of the implications for the liability of new private hospital buildings to value added tax of the recent court ruling.
§ Mr. Lilley[holding answer 24 October 1988]: The European Court of Justice ruled on 21 June that the United Kingdom could not continue to zero-rate the construction of industrial and commercial buildings; this includes private hospital buildings. As I announced in my statement to the House that day, there is no right of appeal against this judgment and the Government are obliged to comply with it. No legislative changes to give effect to the judgment will take effect before 1 April 1989 and building contracts signed prior to 21 June 1988 will continue to be zero-rated, whenever the work is completed. No detailed estimates of the likely additional tax charge on private hospitals are available.