VAT (Hansard, 15 March 2004)

§ Dr. Cable
To ask the Chancellor of the Exchequer if he will make a statement on Her Majesty's Customs and Excise's strategy to tackle VAT missing trader fraud; how many staff were deployed to tackle this type of fraud in(a) 2001–02 and (b) 2002–03; what the cost of deploying staff to tackle this type of fraud was in each case; and what additional costs were attached to the strategy in (i) 2001–02 and (ii) 2002–03. [160866]
106W

§ John Healey
I refer the hon. Gentleman to the answer I gave him on 20 November 2003,Official Report, column 1330W.
Details of Customs' strategy and progress in tackling VAT missing trader fraud are contained in their Annual Report and Accounts 2002–03 published in December 2003 (HC 52).
Information on the number of staff deployed to tackle VAT missing trader fraud in 2001–02 is contained in Tackling Indirect Tax Fraud (November 2001) and for 2002–03 in Measuring and Tackling Indirect Tax Losses (December 2003). Copies of which are available in the Libraries of the House.
Customs does not maintain information about costs in the format requested and it could be produced only at disproportionate cost to produce.

§ Diana Organ
To ask the Chancellor of the Exchequer (1) whether there are regional targets for collection of VAT on(a) new educational buildings and (b) new annexes to educational buildings; [160906]
(2) if he will make a statement on the collection of VAT on (a) new educational buildings and (b) extensions and annexes to existing buildings used for education purposes, in the further education sector. [160907]

§ John Healey
In accordance with the European Union Directives which govern the UK VAT rules, new buildings and annexes to existing buildings constructed by charities for non-business use can be zero-rated in certain circumstances. Educational establishments which meet the tests for zero-rating can benefit from this relief. Extensions, on the other hand, are always standard-rated, except those that qualify as approved alterations to protected buildings.
There are no regional targets for the collection of VAT on new educational buildings or new annexes to educational buildings. Customs and Excise aims to collect the correct amount of VAT at the right time across the whole country, regardless of the region.

§ Charles Hendry
To ask the Chancellor of the Exchequer under what circumstances local authorities are unable to recover VAT incurred by activities and transactions relating to the delivery of services. [161070]

§ John Healey
Local authorities are able to recover the VAT incurred in connection with their statutory activities and in connection with much of their trading. The legal basis for this is in section 33 of the VAT Act 1994.
Under sub-section 33(2), they cannot recover VAT incurred in connection with business activities which are exempt from VAT, unless the amount is insignificant. An amount would be insignificant if it were less than 5 per cent. of the total VAT incurred by an authority in a year.
Under sub-section 33(6) local authorities cannot recover any VAT that would be irrecoverable by all other VAT registered persons.