Mr. Robert HughesTo ask the Chancellor of the Exchequer what was the annual savings in total to registered charities as a result of being zero-rated for value added tax purposes for each of the past five years; and what was the estimated total for the current financial year.
§ Mr. RyderCharities as such are not zero-rated, but they benefit from various VAT reliefs on certain supplies they make and on certain goods and services they buy in, which are zero-rated by virtue of their intended use. They also benefit from the more general zero-rating of some everyday items, such as food. No precise information is available, but it is estimated that these zero-ratings save charities this year some £300 million in tax: a total roughly the same in today's terms for each of the last five years.
§ Mr. MichaelTo ask the Chancellor of the Exchequer what options are currently under consideration in respect to harmonisation of value added tax rules by 1992 or any other target date; what discussions he has undertaken with the EEC or other Governments on this topic; and if he will make a statement on his policy in respect to the protection of charitable bodies in the United Kingdom from any adverse effects.
§ Mr. RyderThe EC Commission now envisages more flexibility in the setting of VAT rates than was apparent in its original proposals for the single market. The Government have welcomed the revised thinking but have made it clear that they still do not consider centrally determined tax approximation to be appropriate or necessary. They have also resisted the suggestion that zero rates after 1992 should be restricted in scope and subject to certain conditions. The United Kingdom position remains that our zero rates as a whole, and not just those of particular interest to charities, are not a pertinent issue for the completion of the single market.
§ Mr. MichaelTo ask the Chancellor of the Exchequer what assessment he has made of the impact on the work of voluntary organisations in Wales of any harmonisation of 9W value added tax which might end the zero-rated concessions currently in force; how much money would be involved; and what action he intends to take to protect the whole of voluntary and charitable organisations in Wales.
§ Mr. RyderThe Government have no reliable figures on the extent to which voluntary bodies in Wales benefit from VAT reliefs, but are opposing any tax approximation proposals for the single market which would further restrict our ability to use zero rates. EC decisions in tax matters require the unanimous agreement of all member states, and there is no question of any unwelcome proposals being forced upon us.