HC Deb 30 June 1999 vol 334 cc226-8W
Mr. Maude

To ask the Chancellor of the Exchequer (1) if he will estimate the total annual revenue if VAT were charged at(a) 17.5 per cent. and (b) five per cent. on the issue, transfer or receipt of, or any dealing with, any security or secondary security; [88379]

(2) if he will estimate the total annual revenue if VAT were charged at (a) 17.5 per cent. and (b) five per cent. on the underwriting of the issue of any money, or security, or note or order for the payment of money; [88380]

(3) if he will estimate the total annual revenue if VAT were charged at (a) 17.5 per cent. and (b) five per cent. on the services of the authorised corporate director of an open-ended investment company so far as they consist in managing the company's scheme property; [88381]

(4) if he will estimate the total annual revenue if VAT were charged at (a) 17.5 per cent. and (b) five per cent. on the management of an authorised unit trust scheme or of a trust-based scheme by the operator of the scheme; [88382]

(5) if he will estimate the total annual revenue if VAT were charged at (a) 17.5 per cent. and (b) five per cent. on the making of any advance of the granting of any credit; [88383]

(6) if he will estimate the total annual revenue if VAT were charged at (a) 17.5 per cent. and (b) five per cent. on the provision of the facility of instalment credit finance in a hire-purchase, conditional sale or credit sale agreement for which facility a separate charge is made and disclosed to the recipient of the supply of goods; [88384]

(7) if he will estimate the total annual revenue if VAT were charged at (a) 17.5 per cent. and (b) five per cent. on the provision of administrative arrangements and documentation and the transfer of the title to the goods in connection with the provision of the facility of instalment credit finance in a hire-purchase, conditional sale or credit sale agreement for which facility a separate charge is made and disclosed to the recipient of the supply of goods if the total consideration therefore is specified in the agreement and does not exceed £10; [88385]

(8) if he will estimate the total annual revenue if VAT were charged at (a) 17.5 per cent. and (b) five per cent. on the issue, transfer or receipt of, or any dealing with, money, any security for money or any note or order for the payment of money. [88386]

Dawn Primarolo

It is not possible to provide the requested estimates due to insufficient data on these specific financial activities.

Mr. Pearson

To ask the Chancellor of the Exchequer what prior consultations were held by Customs and Excise with trade sectors concerned by the legislative changes enacted by the VAT (Finance) Order 1999; and if he will make a statement. [88920]

Dawn Primarolo

Through the regular meetings of the joint finance sector liaison group, businesses have been aware for some time of Customs and Excise concerns in this area. It was not possible to consult on specific proposals because of the risk of tax avoidance. In this area there is a history of forestalling adverse tax changes by the use of artificial pre-payment schemes that side-step the intended effect for some years in the future, leading to considerable loss of revenue.

Mr. Pearson

To ask the Chancellor of the Exchequer what legal advice he sought on(a) the vires of the VAT (Finance) Order 1999 and (b) its compatibility with European law; and if he will make a statement. [88922]

Dawn Primarolo

In considering the content of the Order, Customs took advice from in-house lawyers and from independent leading Counsel.

Mr. Pearson

To ask the Chancellor of the Exchequer when he expects Customs and Excise to produce written guidance on how the provisions of the VAT (Finance) Order 1999 will be applied; and if he will make a statement. [88926]

Dawn Primarolo

HM Customs and Excise produced standard explanatory material on Budget Day when the VAT (Finance) Order 1999 was announced. Immediately following this they undertook detailed explanatory meetings with trade representatives and advisers. Customs have sent a draft of a more detailed guidance note to a number of trade representatives for comment. They aim to publish this by mid July.

Mr. Pearson

To ask the Chancellor of the Exchequer if he will review with Customs and Excise how they propose to handle judgments of VAT tribunals where both the financial sector and Customs and Excise have agreed beforehand to treat such judgments as test cases; and if he will make a statement. [88923]

Dawn Primarolo

The care and management of VAT, including the conduct of litigation, is the statutory responsibility of the Commissioners of Customs and Excise. They did not agree to treat as a "test" case any recent or current case concerning financial services.

The Tribunal has primary responsibility for determining the facts of a case. Its decisions are binding between the parties but do not constitute binding legal precedent. Either party has a right of appeal on a matter of law to the higher courts; and on matters of European law either the Tribunal or a higher court may refer questions to the European Court of Justice.

Mr. Maude

To ask the Chancellor of the Exchequer what plans he has to adopt Article 4.4 of the EC Sixth VAT Directive; and if he will make a statement. [88913]

Dawn Primarolo

Article 4.4 of the Sixth VAT Directive has been incorporated into UK law as VAT Act 1994 sections 4 and 43 and Schedule 1 paragraphs 1 A and 2. There are no plans to introduce further legislation.