John Redwood

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Duty on HMRC to expedite VAT registration and repayment applications

Mr. Redwood: Business is looking for greater speed and greater co-operation from all parts of Government, and I am delighted that my hon. Friend the Member for South-West Hertfordshire (Mr. Gauke) has highlighted the need for improved performance in the important area of VAT refunds and VAT registration. The asymmetry has already been illustrated in one respect. If a business files late, there is an automatic penalty. If the Revenue and Customs is late in returning, that is bad luck on the business concerned.

There is another asymmetry that is relevant and extends more widely across Government: the asymmetry between the standards now expected of a world-class business in terms of error and delay, and the standards that we have grown used to expecting from Government. A world-class business would think it bad to have an error rate as high as 0.1 per cent., and it would expect very little delay in service or product delivery to its customers, yet we are discussing an organisation where 40 per cent. of the initial registrations and 14 per cent. of the refunds are delayed. Those are massively large figures representing millions of cases of late refunds over a reasonable period, which would not be acceptable in the private sector.

It is Government’s job and a Minister’s task to engage with senior officials and administrators to try to lift Government standards to something like those that world-class competitive businesses must hit or go out of business. As we have heard, small businesses and some big businesses can be extremely embarrassed if an important refund is much delayed, because they budget their cash flows to very fine tolerances. If a large cheque from Revenue and Customs is missing, that can make a big difference to the business’s future and therefore to the jobs represented by that business.