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1 Apr 2004 : Column 1694W—continued

Pet Passports

Mr. Gray: To ask the Chancellor of the Exchequer whether VAT is chargeable in relation to pet passports (a) by his Department for providing the certificate and (b) by the veterinary surgeon who vaccinates the animal. [163771]

John Healey [holding answer 26 March 2004]: I have been asked to reply.

DEFRA provides animal health certificates under the Pet Travel Scheme to Government-authorised veterinarians for completion and subsequent issue. Since DEFRA does not charge veterinarians for the supply of certificates, this is outside the scope of VAT.

Veterinary surgeons issue certificates as part of their professional services. Their charges for these services are subject to VAT at the standard rate of 17.5 per cent.

Pre-owned Assets

Mr. Boris Johnson: To ask the Chancellor of the Exchequer (1) what estimate he has made of the number of households likely to be affected by the Inland Revenue's proposed tax on pre-owned assets; [159014]

(2) what research his Department has commissioned on the effect of the proposed tax on pre-owned assets on elderly individuals who have gifted their house to their relatives. [159015]

Dawn Primarolo: Following consultation, proposals to tackle tax avoidance using trusts were set out in the Budget 2004 (paragraphs 5.87 to 5.90).

Premium Bonds

Mr. Gordon Prentice: To ask the Chancellor of the Exchequer what the odds were of winning a prize in the Premium Bond draw with a holding of £1,000 in (a) 2003, (b) 1997 and (c) 1993; and if he will make a statement. [165098]

Ruth Kelly: The Premium Bond odds, with a holding balance of £1,000, were as follows;

December 2003—one in 30.50

December 1997—one in 19.50

December 1993—one in 15.51

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Public Services

Mr. Lyons: To ask the Chancellor of the Exchequer if he will make a statement on levels of investment in public services. [163965]

Mr. Boateng: Tables C4 and C5 of Budget 2004 set out the Government's aggregate plans for public sector capital investment. Under these plans, Public Sector Net Investment will reach 2.2 per cent. of GDP by 2007–08 to rectify the historical under-investment in public infrastructure and deliver improved public services. More information on specific capital allocations through to 2005–06 is set out in the SR2002 White Paper (Cm 5570) and the Government will set out new capital plans for 2006/-07 and 2007–08 in the forthcoming Spending Review.

Register of Interests

Bob Spink: To ask the Chancellor of the Exchequer what the requirements are on officials in his Department to declare current interests; and what register of interests is kept for his departmental officials. [164710]

Ruth Kelly: The Civil Service Management Code sets out the requirement for civil servants declaring any conflict of interest.

HM Treasury staff must declare to their team leader or senior management any business interests they would be able to further as a result of their official position.

Self-Assessment (Late Submission)

Bob Russell: To ask the Chancellor of the Exchequer how many penalty notices were issued by the Inland Revenue for the late submission or non-submission by taxpayers of their 2003 self-assessment tax returns. [162325]

Dawn Primarolo: As stated in Budget 2004 (HC 301), and in line with previous years, 90.6 per cent. of self assessment returns were filled on time. Over one million returns were received electronically. Inland Revenue issued 952,766 Late Filing Penalty Notices on 17 February 2004 for returns not submitted by the due date.

Spirits Tax

Mr. Alan Reid: To ask the Chancellor of the Exchequer what the (a) lower and (b) upper limits are of his estimate of the annual amount of spirits duty fraud; and how he arrived at these estimates. [165232]

John Healey: Customs' estimate of spirits revenue evaded in 2001–02 is £600 million,as reported in "Measuring and Tackling indirect Fraud Losses 2003" (December 2003). The National Audit Office report "Estimating the Level of Spirits Fraud" (March 2004) calculates a corresponding 95 per cent. confidence interval of between £330 million and £1,080 million. This calculation takes account both of sampling variation in the initial level of consumption and of the under-reporting variation. Both reports are available in the Library of the House.

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Lady Hermon: To ask the Chancellor of the Exchequer whether it is his policy that the obligation to stamp spirit bottles announced in the Budget should extend to spirits produced in Northern Ireland. [164572]

John Healey [holding answer 31 March 2004]: The requirement for qualifying UK retail containers to bear a tax stamp will apply to all home-produced and imported products.

Mr. Alan Reid: To ask the Chancellor of the Exchequer what estimate he has made of the change in (a) sales of spirits in the UK and (b) the consequent amount of duty collected that would be caused by increases in the sale price of a 70cl bottle in steps of one penny, up to 40 pence. [164498]

John Healey [holding answer 30 March 2004]: The sale price of a bottle of spirits is a commercial decision for individual retailers. HM Customs and Excise estimates that a 10p increase in the sale price of a bottle of spirits would lead to a reduction in sales of UK-dutied spirits of around 0.8 per cent. The effects of smaller or larger increases would be broadly pro rata. The impact on spirits duty revenues would depend on the extent to which such an increase was related to spirits duty increases or other factors.

Mr. Alan Reid: To ask the Chancellor of the Exchequer (1) what assessment he has made of the cost to the spirits industry of complying with his proposed tax stamps scheme; and which compliance costs he has so far not assessed; [164569]

(2) what assessment he has made of the cost to the spirits industry of keeping tax stamps secure. [164570]

John Healey [holding answer 30 March 2004]: The Government announced in the Budget that, owing to continued high levels of spirits duty fraud, it will legislate to implement the Roques Report recommendation to introduce tax stamps for spirits. In doing so, the Government will help the trade financially with compliance costs by deferring payment for tax stamps, assisting firms with capital investment and freezing spirits duty for the remainder of this Parliament. The Government are also investigating the potential for offsetting security costs. Further announcements will be made once all the detailed offsetting options have been considered in discussion with the trade.

A Regulatory Impact Assessment, to be published alongside the Finance Bill on 8 April, will identify in detail the impacts, costs and benefits of the tax stamp regime.

Mr. Alan Reid: To ask the Chancellor of the Exchequer what discussions he has held with the First Minister of Scotland with regard to the introduction of tax stamps on bottles of spirits. [164565]

John Healey: I refer the hon. gentleman to the answer I gave to the hon. Member for Perth, Annabelle Ewing the hon. Member for Perth earlier today.

T Element

Mr. McNamara: To ask the Chancellor of the Exchequer (1) which (a) universities and (b) other institutions are required to adhere to the Customs and Excise T element; [163962]

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(2) what plans he has to extend the T element to (a) all universities and (b) other institutions; and if he will list the institutions which (i) have not yet adhered and (ii) have adhered but not made payment; [163963]

(3) if he will compensate those universities which have paid the T element and are financially disadvantaged in relation to universities which should have paid but have not. [163964]

John Healey: Organisations can only recover VAT they incur on purchases that relate to their taxable business activities. The provision of education for a fee is exempt from VAT, so universities and other educational institutions cannot recover the VAT which relates to their exempt supplies of education.

Bodies which engage in both taxable and exempt activities must use a partial exemption method to work out the amount of VAT they can recover. The partial exemption method a university uses is designed to take account of its individual circumstances, but HM Customs and Excise cannot accept a partial exemption special method that does not produce a fair and reasonable recovery of VAT.

Universities and other higher education institutions often use methods that calculate their recoverable VAT in proportion to the value of their supplies of education. In these cases, Customs will take account of the value of the Higher education Funding Council teaching grant (the "T element") when agreeing the method.

The Government cannot comment on the VAT affairs of individual taxpayers. Exemption 15(a) of the Open Government Code applies.

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