Extremist Labour Party policies

The EU has more than a hand in VAT. Whilst it does not specifically sets the exact rate - the amount of control it has is signficant - setting the minimum rates and other rules around it.

It is the EU that prevents the removal of VAT on Sanitary products for women.
It is the EU that insists on a minimum 5% vat on electric and gas bills.
The EU wants us to implement VAT on food and childrens clothes.

The EU generates revenue as a percentage of VAT receipts and therefore refuses the removal of VAT from these items and continues to apply pressure for VAT on other None VAT items to raise more and more money from member states to fund it.


EU rules mean the UK cannot reduce VAT on goods and services below 15%, the standard rate of VAT in the EU. The standard rate of VAT in the UK is 20%, so the government could reduce it by up to 5% today if it wanted. Domestic fuel is on a special list of pre-approved goods and services that are subject to lower VAT rates and it would require the agreement of ALL OTHER EU members to reduce it further.

EU countries have been co-ordinating their VAT rates since 1992.

Under EU rules, countries must apply a minimum standard VAT rate of 15%. They have an option of applying one or two reduced rates, no lower than 5%, to certain specified goods on a pre-approved list.

Lower VAT rates, including to 0%, are also allowed but only for the goods which were taxed at that rate before 1991 and since then. Once they move away from the pre 1991 rate the new rate and rules apply and you cannot go back - as we see with domestic and industrial power supplies.

Changes to the VAT rules require unanimous agreement of all 28 EU countries.

 

So that's a universal tax intervention (of sorts) within the EU, albeit V.A.T
Not surprising i guess as this generally is a commerce tax.
Individual government's though set their own levels of income tax and NI contributions: no intervention there.

 

You say the EU as if we had nothing to do with it.
Yes there are some rules/regulations etc that could be better and same goes in our own govt . Some of these rules have been set by MEPs ganging io into groups , Conservative, Socialist Green etc etc .
Taking back control doesn’t alter this in our domestic policies , the EU didn’t set the Bedroom tax for instance .
All these things can be changed in the EU by being at the table and forming allances .
We can and probably will still be governed by EU policies in some sort of trade deals etc but have no say in how to change or get rid of them.

 

As you confirm, they do not set the rate of VAT, and noteworthy both labour and tories support significantly higher vat rates than the EU endorse.

Its also interesting that some argue the EU impose practices upon the UK... yet some criticise the EU for "allowing" member state individuality to use strategies to attract businesses.

 

In the UK VAT is a local tax on local people. In the rest of the Europe - particularly around Brussels and Strasbourg VAT offers a real trading advantage for retailers on opposite sides of the border.
I remember a photo from the 80's showing one side of the street (Belgium) being housing - the other side (Luxembourg ) being shops. So I can see why it was a priority for them to harmonise in a common / single market.

I think VAT is a bit of a red herring though. The impact of EU intervention is relatively low except for the tax on fuel for old people and I think the winter fuel payment removes it.

Purchase tax - the pre-cursor to VAT was 25% so a minimum rate of 15% was easy for the UK govt to swallow in the 70's when it was established. We've never really had it that much lower for long.

There's a legitimate argument that they should allow individual states to remove VAT on sanitary products, domestic fuel, contraceptives, safety equipment, etc and not take revenue from these products. They are shooting themselves in the foot by giving UKIP an easy stick to beat them with. Removing these restrictions, and demonstrating it is adaptable and listens, etc would be a real kick in the balls for UKIP, etc.

I'm not sure of the arguement on Corporation Tax. It's their next target and it is coming. How can you have a common / single market with dramatically different corporate tax rates. I think it's taken so long because one side beats the EU with the stick of interference - when the other side blames them for allowing smaller states to exploit it - and frankly it impacts the ruling classes.

Either way what you can guarentee when it's finally worked out - it will be too high, the EU will cream off too much, it will be set to satisfy the French, the Italians and Spanish will ignore it and we'll complain about it - in or out.


Whatever your argument or standpoint - tax harmonisation is on the EU's agenda. For good or bad it remains sensitve so it takes time. But it's very high on their agenda. What you argue today will not be true in 50 years time. If you like it that's fine. If you don't like it - nows the time to fight.

 

I've no issue with it at all, and makes sense to harmonise over time. Like you say, some argue both sides of the coin, and obviously that's a contradiction and both arguments can't be accurate.

 

My friend,

I have work to do but as you have entered into a debate, I will respect you with one last reply.
The EU has rules about member states' budgets (Although the UK has some exemptions), most notably under the Stability and Growth Pact it does not allow a member to set a budget that would place it in a budget deficit of more than 3% or it would face sanction (most usually witholding grant monies). This limits what governments can do in times of recession to stimulate growth by tax cuts and /or increase public spending funded from borrowing or quantative easing (Euro states can't unilaterally do this anyway). In November the EU blocked its approval of Italy's budget and made them re-write it. I think that is EU controlling fiscal policy and, although member states do have some discretion as to what they do, it is only within parameters set by EU rules.
I do not say the EU is to blame for globalisation, just that some of its policies are beneficial to globalised business, often at the disadvantage of some member states (including the UK) and that the tax arrangements in Luxembourgh are just one such example. I do not share your optimism that large companies would "share rewards" gained by paying less taxes, their CEOs just buy bigger yachts and indulge in self-aggrandisement such as space exploration

Anyway, enjoy the match on saturday, I'm looking forward to it already

 

I think when you sweep a broad brush that every business in the UK is akin to Phillip Green or Elon Musk, you lose any credibility. There are over 5 MILLION businesses in the uk. To tar them all with this notion they are all, without exception, corrupt and self serving and all for the elite is utter tosh, and frankly, its why Labour when it shifts left loses the business vote every single time.

Wage war with people who risk their own equity, take huge stresses on board, employ people and generate growth and development, with great deals of personal sacrifice in many instances... and its obvious you're fighting the wrong battles and believing the likes of the canary far too much.

Of course, there are some excesses, but they are much rarer than you would have anyone believe, but the notion its the norm is embarrassing, and just another divide and conquer exercise to try and mobilise the left, while losing the middle ground and maintaining its lack of electability.

And thank you for clarifying that the EU do not set our taxes and that your suggestion they did was indeed hyperbolic in nature, as is the anti business stance.