Christmas VAT shock

Daily Express :: Politics Feed
Christmas VAT shock

It comes as a think tank said the taxman will take almost £6billion this Christmas - £5.2billion of that from VAT. Retail experts say the extortionate tax burden, along with bad weather and unfair online competition, has seen the number of high street shoppers drop by up to 10.3 per cent in the crucial week before Christmas. The TaxPayers' Alliance (TPA) said each household would stump up £211 for the taxman this Christmas.

 

Of the £5.7billion total, around £5.2billion is raised in VAT. Alcohol duty accounts for £301million and fuel duty £243million.

With the UK tax burden at historically high levels, former ministers are demanding a Brexit bonus of slashing or scrapping VAT. 

Under EU rules, VAT cannot be reduced below 15 per cent to help fund the European Commission's lavish spending, which auditors have failed to sign off in more than 20 years.

The UK's current VAT level is 20 per cent, but Brussels has thwarted attempts to scrap it altogether, or axe it on items like domestic fuel and tampons.

When Britain ends the transition period in 2020, the Chancellor is free to halve the rate or abolish it completely. 

Ex-education secretary Nicky Morgan, who chairs the Treasury select committee, has suggested VAT should be scrapped and former minister John Redwood says Britain is "over-taxed".

He said: "We should take off VAT from things that should not be taxed and let's start by cancelling VAT on domestic fuel.

"People should be allowed to spend more of their money on their own priorities and not the Government's."

Last night former Brexit minister David Jones said another hidden tax - EU tariffs on goods from outside Europe - was adding to the cost of Christmas.

Professor Patrick Minford, a former adviser to Margaret Thatcher and chairman of Economists for Free Trade, said reducing VAT could give the economy a massive boost.

He said: "Taxes drive up the cost of living. Free trade counteracts taxes by cutting the prices of what we buy from abroad.

"Leaving the EU and striking free trade deals around the world would lower the cost of living by eight per cent, the equivalent of reducing VAT by the same percentage."

TPA chief John O'Connell said: "Santa had better watch out that his sleigh isn't next in line for a hefty levy. The taxman should stop playing Grinch and leave us a bit more for our Christmas stockings."

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