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Written Answers to Questions

Friday 12 March 2004

TREASURY

Customs and Excise Staffing

Annabelle Ewing: To ask the Chancellor of the Exchequer (1) how many Customs and Excise staff were employed in Scotland in each year since 2002; [157866]

(2) when the last review of staffing numbers and locations was carried out by HM Customs and Excise; [157867]

(3) what plans he has to increase the number of Customs and Excise staff employed in Scotland. [157868]

John Healey [holding answers 2 March 2004]: The regional distribution of permanent staff (including fixed term) staff in all Government Departments is published annually by the Cabinet Office in Table D of 'Civil Service Statistics', a copy of which is available in the Library of the House.

In April 2002 there were 1170 full time equivalent Customs and Excise staff based in Scotland, along with a further 21.5 casual staff.

The April 2003 figures are due for publication in the summer.

In addition, staff from the national and mobile strike teams of the Law Enforcement business are available to be deployed in Scotland according to the assessed risks and operational needs. Along with detector dog teams and crews of the customs cutter fleet.

The national deployment of Customs and Excise staff is reviewed annually, and at other times as necessary. The number of staff deployed in Scotland are determined by current risk and intelligence factors. Resourcing for the next year will be decided by the Department's business managers in accordance with their assessment of operational needs.

Film Industry

Glenda Jackson: To ask the Chancellor of the Exchequer what decision has been reached on the moratorium proposed to him for affording films in pre-production relief from the newly introduced tax liabilities. [160260]

Dawn Primarolo: No new tax liabilities have been introduced on film production. A number of tax reliefs exist specifically for film production and remain available for film-makers. These include Section 42 of the Finance (No.2) Act 1992 and Section 48 of the Finance (No.2) Act 1997. Measures to be included in Finance Bill 2004 prevent tax avoidance through the manipulation of partnership losses. A number of such avoidance schemes were targeted at the film industry.
 
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Gift Aid

Mr. Don Foster: To ask the Chancellor of the Exchequer (1) what representations his Department has received from (a) the museum and (b) the heritage sector in relation to introducing gift aid tax relief in (i) writing, (ii) meetings and (iii) other forms since 1997; and if he will make a statement; [155988]

(2) what estimate he has made of the cost to museums of (a) computer equipment, (b) staff, (c) administration and (d) other costs in relation to claiming gift aid; and if he will make a statement; [155989]

(3) pursuant to the answer of 15 January 2004 to the hon. Member for Leominster (Mr. Wiggin), Official Report, columns 865–6W, on gift aid, what research his Department has conducted into the impact of lost gift aid revenue on (a) national museums, (b) independent museums, (c) country houses and (d) royal buildings; and if he will make a statement. [155990]

John Healey: Ministers and officials from the Treasury and Chancellor's Departments regularly receive a wide range of representations from museums and the heritage sector, including many on the benefits they receive from Gift Aid.

In April 2000 the Government made improvements to the Gift Aid scheme, as part of a wider package to make the tax system simpler for charities and their donors and to encourage greater charitable giving. In 2002–03 charities received donations under Gift Aid of £2.3 billion, including tax relief from the Government of £506 million.

Under a special exemption introduced in 1989 and imported into Gift Aid as part of a wider reform in 2000, certain heritage and conservation charities are able to claim Gift Aid on membership subscriptions in the same way as they were previously able to claim tax refunds under Deeds of Covenant. Deeds of Covenant lasted for at least three years, meaning that a donor was required to have an ongoing commitment to a charity, but Gift Aid can apply to one-off donations as well.

A number of charities eligible for the special exemption are claiming Gift Aid tax refunds under so-called 'day membership' schemes. These schemes do not generate additional giving, but simply reclassify admission fees as donations on which Gift Aid is being claimed.

The Chancellor of the Exchequer announced in the pre-Budget report (Cm 6042) that the Government will amend the Gift Aid legislation to ensure that the special exemption applies as it was originally intended and not to these 'day memberships'.

This will mean that heritage and conservation charities will continue to benefit from the special exemption where a donor has an ongoing commitment to the charity, such as an annual membership, and these charities—like other fundraising charities—will continue to benefit from Gift Aid on other donations of money.

The Government is consulting closely with charities that might be affected, directly and through their associations and representative bodies, on the detail of how the change may best be achieved.
 
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As I made clear in my earlier answer, no estimate is available of the amount of money being claimed by charities which are taking advantage of this. Charities are not required to differentiate on their Gift Aid claims the amounts they are claiming for 'day membership' income from other amounts they are claiming. No estimate has been made of the cost to museums of claiming the Gift Aid benefits they enjoy.

Housing Stock Transfers

Mr. Drew: To ask the Chancellor of the Exchequer if he will make a statement on the situation of local authorities who have transferred their housing stock and who have to pay VAT on the service arrangements involved in that transfer. [161043]

John Healey: A local authority is entitled to recover any VAT incurred on professional services supplied to it in connection with arranging the transfer of housing stock to the private sector. VAT can also be recovered on certain improvement works the purchaser may require the local authority to carry out as a contractual condition of purchase.

Large Business Office

Mr. Gray: To ask the Chancellor of the Exchequer pursuant to his answer of 12 February, Official Report, column 1556W, on the Large Business Office, when the Director of Inland Revenue's Large Business Office first asked Inland Revenue's internal auditors to review the accuracy of the Large Business Office's compliance data for 2002–03; when the internal auditors reported their findings; when the relevant commissioner first made known to fellow board members the existence of potentially unreliable reports of the Large Business Office's compliance performance; when the Board received the report on the issues of the 2003 review; when Inland Revenue first alerted the National Audit Office to the existence of previously overstated compliance performance for the Large Business Office in Inland Revenue's annual reports; how many of the Large Business Office's geographic offices were revealed by the 2003 follow-up review to have had at least one Large Business Office caseworker who was not reporting yield in line with departmental guidance; and what proportion of Large Business Office caseworkers were revealed not to be reporting yield in line with departmental guidance. [160095]

Dawn Primarolo: The Director of the LBO asked the Internal Audit Office to carry out a review of the 2002–03 figures in April 2003 (after the year end). The IAO made their report in August 2003.

A design fault in the LBO computer system incorrectly invited Inspectors to enter a tax outcome for taxpayer favour adjustments. All taxpayer favour adjustments were recorded in this way. The Board was advised in October 2003 of the overall adjustments required to LBO yield figures. The issue was discussed with NAO at a working level in February 2004 as part of their general audit coverage of the Inland Revenue.
 
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Project ASPIRE

Mr. Gray: To ask the Chancellor of the Exchequer pursuant to his Answers of 8 September, 2003, Official Report, column 95–96W, on the ASPIRE Programme and 11 December 2003, Official Report, column 604W, on the Inland Revenue, on what date it became Inland Revenue policy to include in its invitations to tender provision allowing it to undertake a review of the tax affairs of those companies responding; and on what date it was decided to include a provision in the ASPIRE invitation to tender allowing the Inland Revenue to undertake a review of the tax affairs of those companies responding. [160189]

Dawn Primarolo: As a Government Department, the Inland Revenue must comply with EU Council Directive 50/92, which came into force in the UK in January 1994 as a Statutory Instrument (Public Services Contract Regulations 1993 (1993: No 3228)). This Statutory Instrument allows a contracting authority to reject a service provider if the latter has not fulfilled obligations relating to payment of taxes under the law of any part of the United Kingdom.

Work on drafting the ASPIRE ITT commenced in January 2002 and notification that a review of the tax affairs of bidders would form part of the evaluation was included in a draft version of the ITT issued to the three shortlisted bidders on 31 July 2002.

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