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VAT

Volume 486: debated on Wednesday 21 January 2009

To ask the Chancellor of the Exchequer what assessment has been made of the effect on the economy of recent changes to value added tax rates; what recent representations he has received on this issue; from whom; what responses he gave; and if he will make a statement. (247994)

We reduced the standard rate of Value Added Tax to 15 per cent. from 1 December 2008 to 31 December 2009 as part of a wider fiscal stimulus putting £12.5 billion back into the economy. It would be premature to attempt to make an assessment now of the effect of this 13 month reduction in stabilising the economy.

We have received numerous representations from businesses, business representatives and consumers on issues associated with the reduction in the rate of value added tax to 15 per cent. and its impact. We are acknowledging comments and responding to specific queries.

To ask the Chancellor of the Exchequer what recent estimate he has made of the cost to the Exchequer of the reduction in value added tax announced in the pre-Budget report 2008 in the next 12 months. (249306)

The estimated cost of the temporary reduction in the standard rate of VAT remains as published in table B5 of the 2008 pre-Budget report.

To ask the Chancellor of the Exchequer how many businesses have paid value added tax (VAT) receipts to the Exchequer since the pre-Budget report was published; and what estimate he has made of the effect on consumer spending of the reduction in VAT announced in the pre-Budget report 2008. (249307)

The total number of VAT registered traders is available from the VAT National Statistics bulletin published at:

http://www.uktradeinfo.com/index.cfm?task=bullvat

An assessment of the anticipated impact of the reduction in the VAT rate on consumer spending behaviour can be found in paragraphs 2.40 to 2.45 in the 2008 pre-Budget report.