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Value Added Tax

Volume 955: debated on Thursday 3 August 1978

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asked the Secretary of State for Prices and Consumer Protection when he intends to legislate to require prices and charges to be shewn inclusive of value added tax.

I intend to introduce a draft order implementing the proposals made by the Director General of Fair Trading as modified by the Consumer Protection Advisory Committee. The effect of the order will be that all advertised, displayed or otherwise quoted prices, if not stated as VAT-inclusive, must show the amount of VAT in money terms, for example, £100+£8 VAT. The order will be general in its coverage of prices. Under the Fair Trading Act 1973, the powers to act following the report of the CPAC did not permit of an order for a simple comprehensive requirement for VAT-inclusive pricing.I draw attention to certain aspects of the proposed order. First, in respect of estimates and fixed price quotations only—which are given to individual consumers in response to a request—it will also be permissible to show a VAT-exclusive amount if it is accompanied by a clear indication of the rate of VAT to be added; for example, £100 +8 per cent. VAT.Second, there will be provision for disclaimers in long contracts and catalogues which might be affected by unforeseen changes in the relevant VAT rates.Third, the difficulties faced by those in the building trade in giving written estimates of work attracting varying VAT rates will be recognised.Fourth, the order when made may need to take account of the outcome of the current consultations on price display in cafes and restaurants.I have placed in the Library a copy of the provisions which it is proposed to include in the draft order.