Europe's VAT Trap!

Morning everyone. Reading my paper this morning I came across this letter from a reader,which I would like to share with you. (one can find out some really interesting facts from the Letters page).
It rather surprised me. I can recall when the EU was calling for such measures to be put into place, the British public were having none of it!. This letter seems to put things more in perspective and is certainly something that I feel the Scottish electorate should be made fully aware of, if and when Nicola has her way and a 2nd referendum on Independence comes about. Here below is the letter. Please give your views on this as I fully admit I personally was completely unaware of it…

QUOTE


Europe’s VAT Trap

The minimum rate of VAT chargeable by any EU member is 5 per cent.
When we joined the EEC (as it was then), it was thought that levying five per cent on food, children’s clothes, books and new houses was too great a price to pay by the British people for membership, so the UK was given a derogation allowing zero-rating of those items.

This exemption had to be renewed every ten years, and has been on four occasions - at what cost to our government in terms of concessions in return is unknown.

Since we joined Brussels in 1973, such a derogation hasn’t been given to any new EU state. There is no chance of it being given to Scotland if the Scots were to apply for membership as a separate nation.

If Nicola Sturgeon presents another independence referendum to the Scottish people, how many would vote YES in the knowledge that their food, children’s clothes, books and new houses would suddenly increase in price by five per cent?.

UNQUOTE

Re: Europe's VAT Trap!

That's very interesting I hope Scotland is listening because that's quite a hike.

Re: Europe's VAT Trap!

Hi

VAT, known locally as voluntary additional tax.

Re: Europe's VAT Trap!

Are you lot mad?

Your VAT on most goods and services is 20% - that is one fifth!

Surely you would be better off paying a 5% levy on everything than paying 20% on fewer things?

Our GST is 10% but only basic foods, some education courses and some medical, health and care products and services are exempt from GST. That is half what you pay. A relatively small increase in the cost of children's clothing would be more than offset by the smaller tax paid on everything else.

Re: Europe's VAT Trap!

I prefer our system I think I'd rather pay 20 percent on things and keep food free of tax.

Re: Europe's VAT Trap!

Bruce, from what I understand, we have three tariffs of VAT in the UK.

Standard Rate - for most goods and services

Reduced Rate (5%) - some goods and services, i.e. chilen’s car seats and home energy.

Zero Rate - for most food and children’s clothes.

We pay 5% on our energy bills, but once we leave, if the government wants to, this can be zero rated. At the moment the EU forbids any member state to charge less than 5% for VAT.

And yes, 20% for most goods is far too high, but being part of the EU certainly hasn’t changed this figure has it? And other EU countries paying less for the standard rate certainly has neverresulted in the EU kicking up a stink on our behalf over the amount we currently pay.

So your astonishment means absolutely zilch. Scotland would indeed have to pay even more than at present if, they were accepted into the EU with VAT becoming payable on children’s books, clothes and new housing, when it is zero rated here.

Re: Europe's VAT Trap!

The EU sets a minimum VAT. We choose o have 20% I can't see vat being scrapped post brexit, but was not aware we had a special exemption re food. Thought that was a choice.

Re: Europe's VAT Trap!

Bruce, from what I understand, we have three tariffs of VAT in the UK.

Standard (20%) - for most goods and services

Reduced (5%) - some goods and services, i.e. children’s car seats and home energy.

Zero - for most food and children’s clothes.

We pay 5% on our energy bills but once we leave, if the government wants to, this can be zero rated. At the moment the EU forbids any member state to charge less than 5% for VAT.

And yes, 20% for most goods is far too high, but being part of the EU certainly hasn’t changed this figure has it? And other EU countries paying less for the standard rate certainly has never seen the Commission kicking up a stink on our behalf over the amount we currently pay.

So with the greatest respect, your astonishment means absolutely zilch. Scotland would indeed have to pay even more VAT on food, children’s books, clothes and new housing, when it is zero rated here.

Re: Europe's VAT Trap!

Hi

A simple fact of life.

We are not paying enough Tax , we are borrowing vast amounts and paying vast amounts of Interest on it which our kids will have to pay off.

I do not want my kids paying more Tax and working to the age of 70.

I can look after myself.

We have only paid for 80% of our own Old Age Pensions.

I would rather take the hit, I do not want my kids to pay for my lifestyle.

Re: Europe's VAT Trap!

SF, I'm afraid it's too late for our kids and grandchildren not to have to work until they are 70, regardless of any measures taken now. We are so mired in debt.
It was stated on the news this morning that anyone under the age of 30 will have to keep working until the age of 70 and over!. A sad state of affairs.

At least I was not caught in the Pensions trap. I fell into the category that escaped by the skin of my teeth! I thank god that regardless of the many times I moaned (many times) about the money coming out of my salary towards my tiny private pension, along with my meagre state pension, it meets my needs.
I feel dreadfully sorry for all those having to work so much longer after the year they originally looked forward to.
Also for our future generations who will indeed bear the greatest brunt of what is to come regarding pensions.