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VAT

Volume 451: debated on Wednesday 8 November 2006

To ask the Chancellor of the Exchequer what guidance was issued to those affected by the legislation in relation to trade unions on schedule 9 of the Value Added Tax Act 1994 before May 2002. (99214)

[holding answer 6 November 2006]: Guidance on the scope of the VAT exemption for subscriptions to trade unions can be found in HM Revenue and Customs Notice 701/5, “Clubs and Associations”, published in March 2002. It is available from HMRC’s National Advice Service on 0845 010 9000 or via their website at www.hmrc.gov.uk. Previously, guidance was similarly available in VAT Notice 701/33, “Trade unions, professional bodies and learned societies”, published in August 1997.

All taxes are kept under review and any changes are announced as part of the normal Budget process.

To ask the Chancellor of the Exchequer what steps he is taking to tackle VAT avoidance by retailers marketing entertainment products through Channel Island websites; and what discussions he has had with retailers on their use of such websites to avoid paying VAT. (100192)

The Government are keeping this issue under close review. We have asked the states of Jersey and Guernsey to take measures to curb the activities of companies who have set up in business in the Channel Islands to service the fulfilment industry. If we judge that these measures are not effective, we have made it clear the UK Government may have to take action to reform the provisions which enable low value goods from the Channel Islands to be imported VAT free. My officials and those of HM Revenue and Customs have met a range of retailers to receive representations on this issue.

To ask the Chancellor of the Exchequer what evidence he has received of major retailers avoiding VAT by marketing (a) health food and (b) contact lenses via websites based in the Channel Islands. (100193)

The largest volume of products imported free of VAT from the Channel Islands are CDs and DVDs as well as the traditional products of cut flowers and plants. There is a much smaller proportion of health food products and contact lenses. The majority of internet purchases are imported via Royal Mail where there is no requirement to capture or retain details of individual consignments. There is consequently no reliable information about which firms are engaged in marketing these products.