HC Deb 23 January 2002 vol 378 cc910-1W
Mr. Lidington

To ask the Chancellor of the Exchequer what his estimate is of the revenue that would be forgone if charities which pay irrecoverable VAT on the cost of building and refurbishing cancer treatment facilities were to be allowed to recover VAT or to have such work zero-rated. [26534]

Mr. Boateng

[holding answer 16 January 2002]: No estimate is available of the cost to the Exchequer of allowing charities to recover VAT on the cost of building and refurbishing cancer treatment facilities or the cost of having such work zero-rated.

Mr. Lidington

To ask the Chancellor of the Exchequer (1) what the definition is of a hospice for the purposes of VAT; [26535]

(2) what his policy is towards the liability of hospices for VAT; [26533]

(3) if he will make a statement on how EU law affects his powers to determine the liability of charities for VAT on the construction and refurbishment of facilities for cancer treatment. [26531]

Mr. Boateng

[holding answers 16 January 2002]: EU VAT law provides no specific relief for charities constructing or refurbishing facilities for cancer treatment. Neither does it provide any definition of a hospice. In the UK, the construction of new residential hospices is zero-rated provided the organisation that commissioned the building work also occupies it. The construction of new non-residential treatment facilities and the repair or refurbishment of existing buildings is standard-rated. Long-standing agreements with our European partners allow us to retain our existing zero-rates but prevent us from introducing any new ones.

Mr. Lidington

To ask the Chancellor of the Exchequer if he will make it his policy to allow Macmillan Cancer Relief to recover VAT on its building costs incurred in respect of buildings which are owned or managed by the national health service. [26532]

Mr. Boateng

[holding answer 16 January 2002]: The Government looked very carefully at the issue of irrecoverable VAT as part of the 1999 Review of Charity Taxation, concluding that to allow refund would be prohibitively expensive and would breach fundamental principles of VAT law.

Customs are ready to provide help and advice to any charity experiencing VAT problems. They have recently written to the Chief Executive of Macmillan Cancer Relief and hope to meet the charity soon to discuss the VAT implications of their building programmes.