VAT

HC Deb 03 November 1993 vol 231 cc255-6W

Mr. Dewar

To ask the Chancellor of the Exchequer what would be the impact on the retail prices index of(a) a 1 per cent. increase in the rate of VAT and (b) the extension of VAT at (i) 8 per cent. and (ii) 17.5 per cent. to items currently subject to a zero rate, giving figures separately for each item.

Sir John Cope

The RPI impact—excluding mortgage interest payments—of an increase of I per cent. in the standard rate of VAT is estimated to be 0.50 per cent. The table shows the impact on the RPI—excluding mortgage interest payments—of extending VAT to currently zero-rated items.

	8 per cent VAT	17.5 per cent VAT
Food	1.01	2.20
Construction of new dwellings	—	—
Domestic fuel and power	0.37	0.82
Domestic passenger transport	0.18	0.39
International passenger transport	0.08	0.18

	8 per cent VAT	17.5 per cent VAT
Books, newspapers and magazines	0.13	0.27
Children's clothing	0.09	0.20
Water and sewerage services	0.09	0.20
Drugs and medicines on prescription	—	—
Supplies to charities	—	—
Ships and aircraft above a certain size	—	—
Vehicles and other supplies to disabled people	—	—

Mr. Betts

To ask the Chancellor of the Exchequer if he will list the relief and exemptions on VAT; and what will be the cost of each to the Exchequer(a) in 1993–94 and (b) in 1994–95 if unchanged.

Sir John Cope

[holding answer 2 November 1993]: Figures for 1993–94 are published in table 9 of the publication "Tax Ready Reckoner and Tax Reliefs" which is in the House of Commons Library.

Mr. Dewar

To ask the Chancellor of the Exchequer what would be the effect on Treasury revenue in 1994–95 and in a full year of extending VAT at(a) 8 per cent, and (b) 17.5 per cent, to all items currently zero rated, giving figures separately for each item.

Sir John Cope

Table 9 of the publication "Tax Ready Reckoner and Tax Reliefs"—which is in the House of Commons Library—shows the estimated costs, of not standard-rating currently zero-rated items in 1993–94. These estimates can be scaled up or down to provide a rough indication of the potential revenue from applying any particular rate of VAT to these items except that the figures make no allowance for changes in behaviour.