EU Plans VAT Tax on Food, Which Would Increase Food Costs Up to 20 Percent

EU Plan to Slap VAT on Food

EU plans for a radical tax shake-up could cost struggling families and pensioners £800 a year

January 3,2012

Express - The European Commission wants VAT exemptions on food, children’s clothes and other essentials abandoned in an effort to harmonise the sales tax across Europe.

Its plans come after the Coalition raised the VAT rate to 20 per cent last year but kept an exemption for food, children’s clothes, passenger travel, books, newspapers and other products.

Last night the proposals sparked outrage among politicians and public-spending campaigners who attacked the Eurocrats for trying to interfere in ­Britain’s tax affairs. Ukip leader Nigel Farage said:

“In their desperation to raise cash, the EU is prepared to do anything and hurt the most vulnerable.

“These plans would add up to 20 per cent costs on food and children’s clothes. To put an extra tax on books and newspapers would be a strike for ignorance over education.

“Everyone would suffer, but the most vulnerable would suffer the most.”

The Commission, supported by the London-based Institute for Fiscal Studies think-tank, called for the exemptions to be abandoned to allow a common VAT regime that would streamline the single market.

But the move, which could raise £24billion a year for Government coffers, would deliver a crippling blow to the country’s poorest families and hard-pressed pensioners.

Eurocrats and the institute argue that much of the money could be given back by cutting the standard rate of VAT, lower income tax and increases in benefits. But John O’Connell, of the TaxPayers’ Alliance, said:

“The UK’s tax system is too burdensome and too complex, but changes should be decided here not by Eurocrats.”