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Value Added Tax

Volume 928: debated on Friday 18 March 1977

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asked the Chancellor of the Exchequer what is his estimate of the yield of a 1 per cent. VAT on those food sales on which no VAT is at present collected.

and England, respectively, for each year from the financial year 1969–70, calculated on a comparable basis to the figures given in his reply of 24th February 1977 to the hon. Member for Epping Forest.

There is insufficent information readily available to calculate figures for public expenditure per head for all four countries which are strictly comparable with those given in my reply to the hon. Member on 24th February 1977—[Vol. 926, c. 682–3]—The figures below are partly estimated. In particular, capital grants to nationailsed industries are allocated to countries pro rata to their identifiable expenditure in each country, and not, as in the case of the 1975–76 figures given previously, according to the location of the projects financed.

asked the Chancellor of the Exchequer how many additional civil servants would be required to collect VAT on food assuming that there were a single rate of VAT applicable to all foodstuffs and that the exemption limit for turnover remained unaltered.

It is estimated that Customs and Excise would require about 500 extra staff.

asked the Chancellor of the Exchequer how many extra staff have been employed to administer multi-rate value added tax since its introduction.

Additional staff numbers arising from the higher rate of VAT cannot be isolated from those relating to the administration of VAT as a whole, but it is estimated that the equivalent of about 250 staff in Her Majesty's Customs and Excise are now employed in the collection and administration of the higher rate of VAT.

asked the Chancellor of the Exchequer what would be the variation in yield from value added tax if the rates of 8 per cent. and 12½ per cent. were abolished and replaced by a rate of 10 per cent.

It is estimated that the revenue would increase by about £550 million in a full year.

asked the Chancellor of the Exchequer at what rate it would be necessary to levy value added tax to obtain the same yield if all exemptions and zero rates were abolished and one overall rate introduced.

A single rate of 5 per cent. on goods and services which are currently taxed at the higher rate, standard rate and zero rate would yield approximately the present VAT revenue. There are technical difficulties in taxing many of the supplies which are at present exempt from VAT, and for this reason these items have been excluded.