§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what is his policy on the imposition of value added tax at 17.5 per cent. on(a) auctioneers' services and (b) imported works of art and antiques; and if he will make a statement. [11584]
§ Mr. Geoffrey RobinsonGoods imported into the UK normally bear VAT at the standard rate 17.5 per cent. Under the terms of a derogation from the sixth VAT directive, as amended by the seventh VAT directive, certain works of art, antiques and collectors' pieces are eligible until 30 June 1999 for an effective rate of VAT at importation of 2.5 per cent. After that date, the UK should increase the VAT rate to at least the normal minimum reduced rate of 5 per cent.
458WSupplies of auctioneers' services to persons in the UK are normally liable to VAT at the standard rate of 17.5 per cent. Special arrangements apply when auctioneers' services are supplied in respect of certain works of art and so on held under temporary importation conditions and eligible for the effective rate of VAT of 2.5 per cent. on permanent importation. In these cases all auctioneers' services are taxed at the same effect rate of VAT as the goods themselves, though this is currently the subject of challenge by the European Commission.