Value Added Tax

HC Deb 03 March 1992 vol 205 cc118-9W

Mr. Watts

To ask the Chancellor of the Exchequer what estimate he has made of the benefits to importers from the postponed accounting system for value added tax from 1 January 1993; and what is the additional cost to the large domestic businesses which will be required to account for value added tax on a monthly basis from the autumn of 1992.

Mrs. Gillian Shephard

I refer my hon. Friend to my answer to the hon. Member for Berwick upon Tweed (Mr. Beith),Official Report 25 November 1991, column 375. A new forecast will be available with the Budget statement.

Some 90,000 businesses will make a cash flow saving in 1992–93 from the postponed accounting system equivalent to deferring payment for six weeks.

Some 1,600 of the largest businesses will also experience a reduction in cash flow in 1992–93 as a result of the introduction of accounting for VAT on a monthly basis. They will still have the cash flow benefit of VAT paid by customers before it is paid to the Exchequer, albeit for a shorter period.

Mr. Nicholas Brown

To ask the Chancellor of the Exchequer what is the revenue yield, in the latest year for which information is available, from VAT on(a) hot takeway food and drink, (b) alterations to residential buildings, (c) alterations to non-residential buildings and civil engineering works, (d) newspaper advertising, (e) cereal bars, (f) non-residential construction and property development, (g) news services, (h) protective boots and helmets supplied by employers, (i) fuel and power supplied to businesses, and (j) water and sewerage services supplied to industry.

Mrs. Gillian Shephard

Detail about the revenue yield from VAT on specific items of expenditure is not collected on VAT returns. Estimated receipts for 1991–92 are as follows:

	£ million
(a) Hot takeaway food and drink	400
(b) & (c) Alterations to residential & non-residential buildings and civil engineering works	800
(d) Newspaper advertising	100
(e) Cereal bars	10
(f) Non-residential construction and property development	500
(g) News services	5
(h) Protective boots and helmets supplied by employers	—1
(i) Fuel and power supplied to businesses	100
(j) Water and sewerage services supplied to industry	—1
1 negligible

Mr. Blunkett

To ask the Chancellor of the Exchequer what revenue was generated in 1991–92 by the increase in VAT to 17.5 per cent.

Mrs. Gillian Shephard

I refer the hon. Member to the reply that I gave to the hon. Member for Caernarfon (Mr. Wigley) on 13 February,Official Report, column 595.

Mr. Dunn

To ask the Chancellor of the Exchequer if he will make a statement on the implementation of EC single market legislation associated with value added tax.

Mrs. Gillian Shephard

The Commissioners of Customs and Excise have issued draft Finance Bill clauses relating to the VAT treatment of goods (and associated services), to relevant trade representative bodies for consultation. I have arranged for copies to be placed in the Library of the House.