Steph Peters wrote:
> Paul Boyd <usenet.dont.work@plusnet> of Customer of PlusNet plc
> (http://www.plus.net) wrote:
>
>> vernon said the following on 13/02/2007 17:10:
>>
>>> There isn't the possibility to reduce VAT on bikes to zero percent
>>> anyway as the goverment isn't allowed to introduce new zero VAT
>>> categories.
>>
>> Who is then?
>
> The EC as a whole has a list of categories that can be zero-rated if
> countries wish to. That list is for all practical purposes fixed,
> because it would be impossible to get all the member states to agree
> to an addition. The traditional way round this is to have more than
> one rate and apply a very low rate to things a state would like to
> zero rate.
Not quite.
The 5% rate has a list of things permitted within the EU, and that's the
list which is impossible to change for the reason quoted. Countries may
charge any rate between 5% and 15% for items on that list, but may only set
two rates.
The 0% rate is a special historical temporary arrangement for the UK and
Ireland. I think that "temporary" is almost infinitely long if the UK
government chooses it to be (and ditto for the Irish government). If the
government takes an item out of the zero band, it cannot put it back (hence
household heating, which one government put under full VAT was reduced to 5%
by this government, not zero as it was not permitted to go back to zero)
The standard rate is at least 15%. In practise its between 15% and 25%
depending on country and item in question.
http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/index_en.htm
- Nigel