asked the Minister for Finance (a) the net cost to the Exchequer in a full year of the restoration of VAT credit on the sale of farm produce (b) the total net cost to the Exchequer in a full year of the allowance of rates on land as an instalment payment against total farmers' tax assessments (c) the net cost to the Exchequer in a full year of the abolition of taxation of profits of cooperatives (d) the net cost to the Exchequer in a full year of the allowance of contracting charges against farmers' tax assessments (e) the net cost to the Exchequer in a full year of the abolition of rates on farm dwellings (f) the net cost to the Exchequer in a full year of the payment by farmers of their tax assessments at the end of the assessment year (g) the net cost to the Exchequer in a full year of the full application of the notional assessment system of tax (h) the net cost to the Exchequer in a full year of the abolition of all death duties on farm lands where such lands transfer from father to son (i) the net cost to the Exchequer in a full year of the increase in the wealth tax basic exemption limits by 50 per cent, and (j) the net cost to the Exchequer in a full year of the removal of the tax on fuel oils used by commercial glasshouses and by mushroom producers.
Written Answers. - Farmers' Tax Assessments.
Following are the estimates requested:
|
Proposal |
Net cost to the Exchequer in a full year |
|
£m. |
|
|
(a) |
13.0 |
|
(b) |
7.0 (see note (1)) |
|
(c) |
3.0 |
|
(d) |
1.5 |
|
(e) |
Not available (see note (2)) |
|
(f) |
10.0 (see note (3)) |
|
(g) |
Nil (see note (4)) |
|
(h) |
Not available (see note (5)) |
|
(i) |
1.0 |
|
(j) |
0.25 |
NOTES
1. The total cost of allowing rates as a credit against tax payable would be between £10 and £11 million. However, rates are already allowed as a deduction in computing taxable income at a cost of some £4 million. The net additional cost would therefore be about £7 million.
2. It is not possible to estimate the amount of rates relating to farm dwellings as valuation lists do not distinguish between agricultural dwellings and other dwellings.
3. The cost of £10 million would apply only in the year of change. Thereafter, a full year's tax would be payable each year.
4. The Government's election commitment is that the notional basis of assessment should be provided as an option so that before a farmer is assessed to tax he would have a choice of either the accounts basis or the notional basis. Under the Finance Act 1977 farmers are initially compulsorily assessed on a notional basis but may appeal on the basis of accounts. Since the difference between the two schemes arises out of the timing of the option, the Government's proposal to allow an initial option has no ultimate cost to the Exchequer.
If, in 1977/78, all farmers had been compulsorily assessed on the notional basis with no appeal to accounts, the gain to the Exchequer would have been roughly £6 million. Such a scheme would, however, involve some farmers being asked to pay tax on profits they had not earned. Because of this factor it was always accepted that any scheme using a notional basis would also provide an option for assessment on an accounts basis.
5. The receipts from capital acquisitions tax and the information available to date are not sufficient to enable an estimate to be made of the cost to the Exchequer in a full year of the abolition of this tax on farm land which is transferred from father to son. It will be appreciated that the nature of this tax is such that the receipts can vary from year to year, being dependent on the number and value of gifts and inheritances in a given year.