Mr. R. C. Mitchell
asked the Chancellor of the Exchequer why a council tenant renting a garage or parking space from the local authority does not pay value added tax on the rent of the garage or parking space, but as soon as he starts to purchase his council house he has to pay value added tax on the rent for the same garage or parking space; and if he will make a statement.
§ Mr. Denzil Davies
The grant of facilities for parking a vehicle is chargeable with VAT at the standard rate. Where a garage is let by a landlord to a tenant as part of, or in conjunction with, the letting of domestic accommodation, the combined rent is regarded as exempt from VAT under the provisions in Group 1 of Schedule 5 to the Finance Act 1972. I am writing to my hon. Friend in fuller explanation.