Tax body demands VAT simplification
The Association of Taxation Technicians (ATT) has called for the Government to use the UK's exit from the EU to review what it calls ‘overly complex' rules surrounding VAT on food and drink.
In his debut Budget speech on 11 March, Chancellor Rishi Sunak announced that the Government intends to use ‘new freedoms' after the end of the Brexit transition period to scrap the 5% rate of VAT on women's sanitary products.
The ATT argues that there is also an opportunity to reduce complications and inconsistencies across the VAT regime.
Michael Steed, co-chair of the ATT Technical Steering Group, said:
"Many of the rules for food and drink derive from the old Purchase Tax regime, which was replaced with VAT when the UK joined the EU in 1973. As a result, they are often out of date and difficult to apply in the modern world.
"This has led in the past to the Tax Tribunal having to consider such intriguing questions as whether Jaffa Cakes are a cake or a biscuit, and whether Pringles are crisps or not. The decisions in these cases often throw up results which sound utterly ridiculous to the average person."
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