No: C&E 6                            29 November 1994


                            BUDGET 1994 : VAT

ENTERTAINMENT, RECREATIONAL AND OTHER ACTIVITIES WHICH
INCLUDE PASSENGER TRANSPORT


The Chancellor proposes to confine the zero-rating for
passenger transport to public passenger transport in the generally
accepted  sense, as envisaged when the relief was first introduced.

With effect from 1 April 1995, services relating to
entertainment or recreational activities and car parking at airports, which
include elements of passenger transport, will become wholly standard-
rated.


NOTES TO EDITORS

1.     The current provisions for zero-rating passenger
transport are to be found in item 4 of Group 8 of Schedule 8 to the VAT
Act 1994, to which new provisions will be added.

2.     The zero-rating for public passenger transport was
originally provided on social grounds, being aimed at all types of
public transport, the cost of which represented a significant
element in the budgets of families. However, over the years, the
application of his zero-rating has been extended to include certain
transport services which neither qualify in the accepted sense as
passenger transport nor represent essential expenditure for the
average family.

3.     Transport services which will become standard-rated
include   "fun" or historic rides, transport within theme parks and
other places of entertainment or historic interest, transport
connected with car parking at airports, and hot air balloon rides.
However,  public transport in its usual sense by train, bus, coach or
air is    not affected, and will continue to be zero-rated. "Park and
ride"     schemes designed to relieve traffic congestion in city
centres will also continue to benefit from zero-rating.

4.     The revenue yield is estimated at Pounds 45 million
in a full year.

5.     A Compliance Cost Assessment (reference CCA 6) is
available,   copies of which can be obtained from Jill Lewis, BACU3, 10th
floor W,     HM Customs & Excise, New King's Beam House, 22 Upper Ground,
London       SE1 9PJ (Tel No: 0171-865-5570).

6.     Details for traders are available in Budget notice BN
85/94.




ISSUED BY:          PRESS AND INFORMATION OFFICE,
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                    22 UPPER GROUND,
                    LONDON, SE1 9PJ

TELEPHONE:          0171 865 5468/5470/5471

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