The EU-enforced tampon tax causing a cross-party rebellion isn’t the only example of Brussels stealth tax imposed in this Budget. Following a decision by the Court of Justice of the EU in June last year, the 20% VAT rate was also forced upon “energy saving materials”, previously taxed at just 5%. People who want to insulate their homes are being whacked by an EU tax hike. Worth reading John Redwood on this – it has gone down like a cup of cold sick with Tory backbenchers.
Third cross party revolt now brewing on Budget I hear – to vote down EU directive to raise VAT on home insulation. Next week will be tricky.
— Tom Newton Dunn (@tnewtondunn) March 17, 2016
Other areas covered by the EU’s barmy VAT rules include digital services like Netflix, now charged at the place of purchase. Not only this, British digital businesses selling products in EU member states are subject to local VAT rates, for example Croatian, Danish, and Swedish VAT rates of 25%, or even sky-high Hungarian VAT at 27%.
Osborne announced yesterday “We understand that tax affects behaviour. So let’s tax the things we want to reduce”. By his own logic, the EU wants to reduce energy efficiency and online businesses…