News Release

5th August 2002

MINISTER SEEKS SOLUTION TO ARBORETUM VAT CHARGES

John Healey, the Government Treasury Minister responsible for Customs and Excise and VAT, has written to Michael Fabricant telling him he has "instructed" Customs officials to meet with representatives of the National Arboretum near Alrewas in Lichfield to discuss the imposition of 17.5% VAT on memorials to Britain's war dead and seek "an outcome which is acceptable to all parties, both in terms of the Arboretum's activities in the past and its activities in the future". Michael Fabricant says "We are not through the woods yet, but this is encouraging. Customs and Excise have claimed that The National Arboretum owes a huge amount of money on trees already planted as well as on its future activities. This is jeopardising the future of the whole project. I am reassured that the Minister recognises that a solution must be found to both past and present VAT liabilities".

The purchase of trees and other memorials to commemorate those who fell for their country are now being regarded as a "taxable supply" for VAT purposes. Michael took this up with Government Ministers last month. Michael said at the time of contacting the Treasury: "I have read the correspondence from the Customs and Excise and it is almost obscene in ignoring the sensibilities of loved ones. To whom is the tree being 'supplied'? Certainly not the serviceman killed in service for his or her country. On the one hand, the Ministry of Defence supports the work of the National Memorial Arboretum; on the other hand, the Government is taxing those who contribute."

In his letter to Michael Fabricant, John Healey continues: "It was useful to have our conversation in the Commons as well as receive your correspondence........... I have asked for a report from Customs officials following discussions with the National Memorial Arboretum and I will bring you up to date after this."

"I now await the report from the Minister and from the National Arboretum. I hope this matter can now finally be resolved." adds Michael Fabricant.