Ivan Yates
Question:221 Mr. Yates asked the Minister for Finance the cost of reducing the 12.5 per cent VAT rate by 1 per cent.
Written Answers. - VAT Rate Reductions.
The current VAT rate of 12.5 per cent covers, on the one hand, certain goods and services, e.g. non-house building, labour intensive services and short-term car hire, which, under EU law, cannot be reduced to below 12 per cent and, on the other hand, goods and services, e.g. housing and hotel accommodation, where no such constraint exists. The estimated cost to the Exchequer of reducing the former category to 12 per cent would be approximately £4 million in 1994 and £6.5 million in a full year; while the cost of a 1 per cent reduction in the latter category is estimated to be of the order of £25 million in 1994 and £40 million in a full year.
Ivan Yates
Question:222 Mr. Yates asked the Minister for Finance the cost of reducing the 21 per cent VAT rate by 1 per cent.
The cost to the Exchequer of reducing the 21 per cent VAT rate by 1 per cent is estimated at £54 million in 1994 and £87 million in a full year.