VAT (Funeral Charges)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 10th March 1988.

Alert me about debates like this

Photo of Mr Max Madden Mr Max Madden , Bradford West 12:00 am, 10th March 1988

To ask the Chancellor of the Exchequer if he has received any representations seeking zero-rated value added tax on funeral charges.

Photo of Mr Max Madden Mr Max Madden , Bradford West

Is the Minister aware that, on average, about 10,000 people die each week and that the National Association of Funeral Directors has estimated that the present VAT arrangements result in the Treasury receiving between £14 million and £18 million a year, which is, in effect, a tax on death? Will he look at the possibility of giving tax relief on simple insurance schemes, which would give reassurance to many elderly people that their funerals have been paid for, and result in reducing their savings below the £6,000 a year capital limit which prevents them from getting benefit?

Photo of Peter Lilley Peter Lilley The Economic Secretary to the Treasury

I understand the point that the hon. Gentleman makes. The Government recognise the inevitable sadness at the time of bereavement by exempting essential funeral charges from VAT. We do not have the power, however, under our treaty obligations and successive directives on VAT to change that from exemption to zero rating, but I will draw to the attention of my right hon. Friend the point that the hon. Gentleman has made about insurance policies for funerals and the costs of bereavement.