Written question asked by Sally Keeble (Labour) on Monday, 8 November 2004, in the House of Commons. It was due for an answer on Thursday, 11 November 2004. It was answered by Baroness Primarolo (Labour) on Thursday, 11 November 2004 on behalf of the Treasury.

Treasury

Question: To ask Mr Chancellor of the Exchequer, if he will make a statement on plans to change the tax status of Business Link organisations. (Failed OPQ)

Answer: Ms Keeble: To ask the Chancellor of the Exchequer if he will make a statement on plans to change the tax status of Business Link organisations. [197398] Dawn Primarolo: Changes to the way Business Link organisations deliver their services mean that an increased part of their service is being provided free of charge. This has implications for VAT. It is a basic principle of VAT that when an activity is provided free of charge there is no supply for VAT purposes and the supplier therefore cannot recover the VAT incurred on purchases. Customs are currently working with the Small Business Service, Regional Development Agencies and Business Link organisations to put in place simplified arrangements to enable Business Link organisations to calculate their tax liabilities.

Secondary information