§ Mr. Ian TaylorTo ask the Chancellor of the Exchequer (1) what is the yield of VAT estimated for the current financial year; and what would be the yield if VAT at 17.5 per cent. were extended to all goods and services currently zero-rated or exempt;
(2) what would be the yield of VAT in the current year if a rate of 15 per cent. were applied to all goods including those presently exempted or zero-rated.
§ Sir John CopeWe estimate the VAT yield for 1992–93 will be £37.7 billion.
The ready reckoner published in table 4.8 of the 1991 autumn statement suggests that, had the VAT rate been reduced to 15 per cent. from April 1992, the yield might have been £4.3 billion less.
No estimates are available for the likely revenue effect from applying the standard rate of VAT to goods and services that are currently zero-rated or exempt from VAT. The 1992 "Financial Statement and Budget Report" provides some indication of the individual costs of the zero rates in 1991–92. These costs are not additive, however, and make no allowance for the likely behavioural response were the standard rate of VAT to be applied to these supplies.