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VAT: Alcoholic Drinks

Volume 506: debated on Monday 1 March 2010

To ask the Chancellor of the Exchequer if he will take steps to prevent value added tax being reclaimed by retailers in relation to loss-leading on marketing promotions of alcohol products. (319352)

[holding answer 26 February 2010]: I refer the hon. Member to the answer given to him on 3 February 2010, Official Report, column 371W. Businesses are entitled to reclaim the value added tax on costs that relate to their business activities. There are therefore no grounds on which to take steps to prevent value added tax being reclaimed by retailers in relation to marketing promotions of alcohol products, even if those are loss leading within the wider context of their business activities.