§ Mr. AmosTo ask the Chancellor of the Exchequer if he will make a statement on the consequences on village halls of the extension of value added tax on the construction of new buildings, fuel and power, water and sewerage supplies.
§ Mr. Lilley[holding answer 20 April 1989]: Where village halls are engaged in business activities, VAT will he due on supplies to them of construction services and fuel and power. Water and sewerage services will, however, remain zero-rated. The imposition of tax on supplies of construction services and fuel and power is a consequence of the unwelcome European Court of Justice ruling published on 21 June last year. Business is defined widely in EC VAT law and could include the hiring out of village halls to local groups and other users.