§ Mr. Alfred Morris
asked the Chancellor of the Exchequer what proposals he has received from the Charities VAT Reform Group; what reply he has sent; and if he will publish the exchange of correspondence in the Official Report.
§ Sir Geoffrey Howe
The chairman of the Charities VAT Reform Group wrote to me proposing that all charities should be given a refund of VAT on all their purchases. His letter said that research by the group indicated that no more than 10,000 charities would claim such a refund if a de minimis limit of £150 per annum was introduced, thereby making the administration of the relief a practical proposition. In my reply I gave reasons why, after careful and sympathetic consideration, this estimate of potential claimants is considered to be far too low and why it is likely that at least 100,000 charities would seek to benefit from this kind of relief.
I do not publish letters which are sent to me. I shall write to the right hon. Member explaining these reasons in more detail.