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VAT: Financial Services

June 5, 2007

Question written on 05/06/2007

To ask the Chancellor of the Exchequer what consultation his Department undertook with businesses within the City of London ahead of the change in policy in July 2006 which ceased the right of claimants from outside the European Union in the financial services and insurance sectors engaged in the supply of services to non-EU customers to recover value added tax incurred on goods and services from UK suppliers.

Answered by Edward Balls

I refer the hon. Member to the answer I gave him on 19 December 2006, Official Report, column 1729W.In order to minimise the risk of forestalling, no pre-announcement was made and businesses were not consulted about the change. However, HM Revenue and Customs officials are discussing the issue with a number of representative bodies.