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Value Added Tax

Volume 893: debated on Monday 9 June 1975

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asked the Chancellor of the Exchequer what is his estimate of the rates of VAT or of a straight ad valorem tax, respectively, on wine that would be necessary to raise the same revenue as the rates of duty in Schedules 4 and 5, respectively, to the Finance (No.) Bill.

It is not possible to provide the information in respect of Schedules 4 and 5 separately, but it is estimated that a VAT rate of 47½ per cent. or an ad valorem duty rate of up to 175 per cent. would raise the same amount of revenue duty plus VAT.

asked the Chancellor of the Exchequer what is his estimate of the total increased annual administrative cost to business firms of the changes in the VAT rates.

I regret that I cannot usefully make such an estimate. The costs will no doubt vary widely from firm to firm, according to the nature and oganisation of the business and the extent to which it had accepted the advice of Customs and Excise to make advance preparations for the contingency of additional rates.

asked the Chancellor of the Exchequer whether he will, in line with the special concessions which exist for printed books, propose extending at the earliest opportunity Section 4 of the Finance Act 1972 to provide VAT relief for the purchase of book tapes.

asked the Chancellor of the Exchequer if he will introduce an allowance or collection fee for individuals and small business men in return for their unpaid services in collecting VAT.

asked the Chancellor of the Exchequer what he estimates will be the gross return to the Treasury of VAT at the existing increased rates during the current financial year.

asked the Chancellor of the Exchequer what was the return to the Inland Revenue on those items on which VAT is now charged at 25 per cent. in the last complete financial year in which the rate was 10 per cent.

There has been no complete year in which the rate of VAT on all supplies now charged at the 25 per cent. rate was 10 per cent.; petrol and derv were zero-rated in 1973–74 and the standard rate was reduced to 8 per cent. on 29th July 1974. Customs and Excise estimates that, if the rate had been 10 per cent. throughout 1974–75. the full-year yield of VAT on items in Groups 1–8 of the Higher Rate Schedule would have been £325 million.