In that posting I mentioned that the Commission, the one organization that can actually do something about VAT has been planning to introduce a little flexibility in the structure. Not, you understand, that any country will now be able to decide on various matters to do with VAT, let alone be allowed to opt out of it and decide to have, let us say, a local sales tax. Far from it. Just a little flexibility.
Lord Willoughby de Broke asked HMG in writing what they proposed to do about the Commission proposals.
Whether they will support at the November Economic and Financial Affairs Council meeting the European Commission's proposal to amend VAT directive 2006/112/EC to allow member states flexibility on VAT rates for labour-intensive services.Let's face it our government can do nothing about the tax itself or any flexibility. It can support or not support the European Commission's proposals.
It would appear that even that is beyond them. Here is Lord Myners's reply:
The Government are generally supportive of the legislative proposal adopted by the Commission, consistent with its position of supporting the flexibility of member states to apply their own choice of VAT rates to further their domestic priorities and social objectives, provided that this does not materially affect the functioning of the internal market.Reassuring.
Member states are currently discussing the Commission proposal, and whether any amendments should be made before it is considered by Ministers, at official level in Council working groups. The Government will take a view on the final text when it is submitted to Ministers by the presidency.