§ Lord Freemanasked Her Majesty's Government:
Whether any VAT is paid on procuring defence equipment by the Defence Procurement Agency; and, if so, whether it is refunded to the defence budget. [HL3616]
§ Lord McIntosh of HaringeyVAT is payable on procuring some defence equipment. In common with other government departments, the Ministry of Defence can recover some of the VAT it incurs under Section 41(3) of the VAT Act 1994. VAT which cannot be so recovered is taken into account when the budget for the Ministry of Defence is agreed.