§ Mr. SpellarTo ask the Chancellor of the Exchequer if he will make a statement as to the reasons for the increase in value added tax write-offs between 1990 and 1991.
§ Sir John CopeThe increase in value added tax write-offs between 1990 and 1991 was attributable primarily to an increase in the number of VAT registered traders being declared insolvent. The figures for 1991 also include some £80 million written off following a special review of long standing debts on the VAT ledger.
§ Mr. Jon Owen JonesTo ask the Chancellor of the Exchequer in what circumstances the 20 per cent. penalty on value added tax debt is incurred.
§ Sir John CopeThe maximum rate of surcharge affects only those who persistently fail to submit returns and pay tax on time. As a result of proposals announced in the recent Budget statement and subject to the passage of the Finance Bill, no surcharges of 20 per cent. will be issued for tax periods ending on or after 1 April 1993. Prior to 1 April 1993, a taxpayer would incur a 20 per cent. surcharge only if at least six returns or payments were submitted late.