§ Mr. BattleTo ask the Chancellor of the Exchequer what plans he has to introduce value added tax on the sale of second-hand goods in charity shops; whether the seventh European Commission directive on value added tax applies to goods which are being resold for charitable purposes; and what estimates have been made of(a) the gain to the Exchequer and (b) the loss to charitable income of levying value added tax on goods sold in charity shops after 1996.
§ Sir John Cope[holding answer 16 June 1992]: We have no such plans and so no financial effects are anticipated. In principle the draft seventh VAT directive, if adopted as at present drafted, would apply to donated second-hand 540W goods being sold for charitable purposes from 1993. But these are zero-rated in the United Kingdom and our zero rates are already fully safeguarded until at least 1997 under the sixth VAT directive. Decisions on tax matters within the EC require unanimity and there is no question of the United Kingdom being forced to accept unwelcome proposals to end zero-rating after that.