asked the Chancellor of the Exchequer what would be the yield in a full year of the maximum possible increase in the lower rate of VAT permissible under the regulator powers of the Finance Act 1961, Section 9; and what would be the loss to the Revenue in a full year of the maximum possible decrease in the higher rate of VAT permissible under those same powers.
The maximum increase in the standard rate of VAT permitted by Section 9 of the Finance Act 1972 as amended by Section 20 of the Finance (No. 2) Act 1975 is from 8 per cent. 10 per cent. and the maximum reduction in the higher rate from 12½ per cent. to 9⅜ per cent. It is estimated that the former would yield about £800 million in a full year and the latter, if 9⅜ per cent. could be regarded as a practical rate, would reduce the revenue by about £140 million.
asked the Chancellor of the Exchequer what would be the yield in a full year of the maximum increase in indirect taxation permissible under the regulator powers of the Finance Act 1961, Section 9, and how much of the increased yield would derive from VAT, oil duties, tobacco duties and duties on alcoholic beverages, respectively.
The Treasury has the power to vary the rates of duty on hydrocarbon oils, alcoholic drink, matches, mechanical lighters, and betting and gaming duties under Section 9 of the Finance Act 1961, the rates of VAT under Section 9 of the Finance Act 1972, and the rates of duty on tobacco products under Section 6 of the Finance Act 1976. It is estimated that the maximum additional revenue in a full year obtainable by use of these powers would be: