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Value Added Tax

Volume 958: debated on Wednesday 15 November 1978

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asked the Chancellor of the Exchequer what action he is taking to clarify the law relating to the charging of value added tax to market traders on the services supplied by market operators.

When VAT was first introduced, Customs and Excise took the view that market stall rentals could be regarded as the consideration for licences to occupy land and, as such, exempt under group 1 of schedule 5 to the Finance Act 1972. In the light of subsequent decisions of the courts and the independent VAT tribunals, Customs and Excise has reviewed the application of this exemption in a number of areas, so as to distinguish more clearly between licences to occupy and the more general class of permissive licences for the use of land. If a licence is to qualify for exemption, Customs and Excise considers it reasonable to look for a continuous period, disregarding non-business hours, of more than 24 hours. Market stall rentals which do not satisfy these criteria are now considered to be subject to VAT at the standard rate.This approach has been explained both to the Chartered Institute of Public Finance and Accountancy and to the National Association of British Market Authorities. Customs and Excise is now undertaking the consultations regarding VAT on licences related to land, which I referred to in the Budget debate on 12th April.

asked the Chancellor of the Exchequer what representations he has received from the manufacturers of aids for the disabled about the level of value added tax on their products.

We have received a few representations from manufacturers seeking reliefs additional to the substantial reliefs already in operation.