§ Brian CotterTo ask the Chancellor of the Exchequer how many businesses his Department estimated would be lifted out of the VAT regime at the time of each increase in the annual taxable turnover limit since 1997. [162666]
§ John HealeyOn average, annual increases in the VAT registration threshold keep around 3,000 of the smallest businesses out of the VAT system.
Estimates of the number of businesses kept out by each increase since 1997 are given in the following table:
£000 Date of increase New threshold Number of businesses December 1997 49,000 200 (part year effect only) April 1998 50,000 3,000 April 1999 51,000 3,000 April 2000 52,000 3,000 April 2001 54,000 5,000 April 2002 55,000 2,000 April 2003 56,000 2,000 April 2004 58,000 5,000 (Businesses that did not grow in real terms will be reflected in more than one year so individual estimates should not be summed)
§ Brian CotterTo ask the Chancellor of the Exchequer how many small businesses have taken up the flat rate VAT scheme in each year since its introduction. [162667]
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§ John HealeyThe VAT flat rate scheme for small businesses was introduced on 25 April 2002. There were approximately 8,000 businesses using the scheme at 31 March 2003, and around 15,000 in December 2003.
§ Mr. MossTo ask the Chancellor of the Exchequer if he will refund to charitable museums VAT which has been incurred on(a) purchases made possible by grant monies from the National Lottery and (b) other purchases. [162352]
§ John HealeyAdmission of persons to premises for a charge is a business activity for VAT purposes, so a museum that charges for admissions will normally be able to recover the VAT incurred on its purchases, building maintenance and other costs. Museums that charge admission fees that are exempt from VAT are not able to recover VAT incurred on their purchases.
Under normal VAT rules, VAT incurred on goods and services relating to 'non-business' activities cannot be recovered. Free admission of persons to premises is a non-business activity for VAT purposes, therefore museums which do not charge for admission, cannot recover the VAT they incur on related purchases, irrespective of the source of the funding used to make these purchases.
However, in September 2001, the Government introduced a VAT refund scheme which allows the main national museums and galleries which do not charge admission to recover VAT they incur on their purchases. This scheme was designed to remove an obstacle VAT was creating to the delivery of the Government's 1997 manifesto commitment that there should be free access to the main national museums and galleries.
The Chancellor has also announced in this year's Budget that the commitment to achieve free access has been an outstanding success and that, building on this success and in light of the Goodison Review, the Government will now consider the issue of extending the free access commitment for the main national museums and galleries, and the VAT refund scheme that has helped to deliver it, to university museums in the context of the forthcoming Spending Review.