Compensation Payments: VAT

Part of the debate – in the House of Lords at 3:00 pm on 27 October 2003.

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Photo of Baroness Blatch Baroness Blatch Shadow Deputy Leader of the House of Lords 3:00, 27 October 2003

My Lords, I am grateful to the Minister for that Answer. As the Government are recipients of VAT, does he agree that it is very unsatisfactory that compensation cannot be paid ex-VAT in order to stop the incredibly expensive paper chase? In 1997, two successful claims were made, and compensation received, under the Firearms (Amendment) Act. The two companies involved were both paid for the same kind of reasons but, more than six years later, through a tribunal system—which has been extremely costly—one company has been told that VAT is not due to be paid on the amount of compensation it received and the other company is still waiting, having paid the VAT some five and half years ago. Does the Minister agree that this is a very unsatisfactory state of affairs?