Adjustment of Contracts on Changes in Tax

Part of Clause 42 – in the House of Commons at 12:00 am on 12th July 1972.

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Photo of Mr John Nott Mr John Nott , St Ives 12:00 am, 12th July 1972

This is a very complicated matter, and we debated it at some length in Standing Committee. Let us assume that in the instance of the television set two or three payments are made before the tax is raised. In that case, the payments will have been tax inclusive of the old rate of tax. However, if the rate of tax is then raised, Clause 42 then comes into effect and will apply to subsequent payments. The new tax rate will exist.

I think that my hon. and learned Friend the Member for Dover (Mr. Peter Rees) is confused because by regulations there will be a succession of supplies. Perhaps if I had said that at the beginning the position would have been made clearer more immediately. Regulations will define the matter as being a succession of supplies rather than a single supply.