Value Added Tax

HC Deb 01 April 1993 vol 222 cc367-8W

13. Mr. Burden

To ask the Chancellor of the Exchequer what assessment he has made of the impact of extending value added tax to domestic fuel on pensioners in the west midlands.

Mr. Nelson

In reaching his Budget decision to extend VAT to supplies of domestic fuel and power, my right hon. Friend took careful account of the impact on all sectors of society. That is why he explained his Budget speech that extra help will be given to poorer pensioners and others on low incomes.

Mrs. Anne Campbell

To ask the Chancellor of the Exchequer what is the estimated reduction in domestic fuel consumption as a result of levying VAT at(a) 8 per cent. and (b) 17½ per cent.; and what is the amount of revenue forgone in VAT receipts on fuel as a result of that reduction.

Sir John Cope

Value added tax at 8 per cent. is expected to reduce demand for domestic fuel and power, in volume terms, by around 12 per cent. in the short run; VAT at 17½ per cent. by around 3 per cent. in the short run.

In 1993–94 terms, the full year effect of this fall in demand on VAT receipts from domestic fuel and power is estimated to be around £15 million for an 8 per cent. rate of VAT, and around £70 million for a 17½ per cent. rate of VAT.

Mrs. Anne Campbell

To ask the Chancellor of the Exchequer what is the estimated revenue obtained from levying VAT at(a) 8 per cent. and (b) 17½ per cent. on domestic fuel if there were to be no reduction in consumption.

Sir John Cope

Table 4.1 in chapter 4 of the 1993–94 "Financial Statement and Budget Report" provides an estimate of the direct revenue effects from introducing VAT on domestic fuel and power. Had we assumed no change in demand for fuel and power resulting from the measure the estimated revenue effects would have been around £15 million less in 1994–95 and around £5 million less in 1995–96. This takes account of the impact that a lower elasticity would have on demand for other taxable goods.

Sir Michael Grylls

To ask the Chancellor of the Exchequer how many member states of the EC have failed to take the necessary measures to implement the abolition of valued added tax collection on goods crossing frontiers.

Sir John Cope

All EC member states have reported that they have implemented the provisions under the sixth VAT directive for the accounting of VAT on intra-Community movements of goods on acquisition.

14. Mr. Mackinlay

To ask the Chancellor of the Exchequer what representations and objections he has received about his proposal to extend the value added tax base announced in his Budget.

Mr. Dorrell

My right hon. Friend has received a number of representations on the subject.

22. Mr. Barnes

To ask the Chancellor of the Exchequer what were value added tax revenues in 1979 and 1992 expressed as a percentage of total indirect and direct tax revenues for those years.

Mr. Dorrell

12.9 and 19.7 per cent. respectively.