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VAT: Retail Trade

Volume 486: debated on Tuesday 13 January 2009

To ask the Chancellor of the Exchequer what representations his Department has received about retailers miscalculating the reduction in the rate of value added tax. (245574)

We have received representations on a number of issues associated with the reduction in the rate of value added tax to 15 per cent. There is no indication of significant or widespread problems relating to retailers incorrectly applying the change, but Her Majesty's Revenue and Customs is committed to providing guidance and support to any businesses or consumers who are experiencing problems.

To ask the Chancellor of the Exchequer what steps HM Revenue and Customs is taking to ensure that the reduction in the rate of value added tax is passed on to customers. (245576)

Her Majesty's Revenue and Customs has provided detailed guidance and support to help every VAT registered business apply the new rate of VAT correctly from 1 December 2008. The Government have called on businesses to pass on the VAT rate reduction to consumers through lower prices, and many have responded, but decisions on prices are for businesses rather than Government.