B1500 – Value Added Tax Act 1994 (Amendment) Bill 2019 Watch

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What is this thread about?
This is a bill in the Model House of Commons (MHoC). It's a piece of proposed legislation that is currently being debated, and there's a good chance that the House will later vote on whether to pass it into TSR law. All are welcome and encouraged to ask questions about the bill's content and join in the debate – you don't have to be in a party or be an MP to do so.

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B1500 – Value Added Tax Act 1994 (Amendment) Bill 2019, TSR Liberal Democrats


Value Added Tax Act 1994 (Amendment) Bill 2019

An Act to reclassify several types of products in schedule 8 of the Value Added Tax Act 1994, thus reducing VAT on these products to 0%.

BE IT ENACTED by the Queen's most Excellent Majesty, by and with the advice and consent of the Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

1: Amendments to the Value Added Tax Act 1994
1) The following types of products shall be listed in schedule 8 Zero Rating of the Value Added Tax Act 1994:

i) Children’s car seats
ii) Contraceptive products
iii) Domestic fuel or power
iv) Energy-saving materials: installation
v) Heating equipment, security goods and gas supplies: grant-funded installation or connection
vi) Welfare advice or information

2) The following types of products shall be listed in schedule 8 Zero Rating of the Value Added Tax Act 1994:

i) Women's sanitary products

2: Citation and Commencement
(1) This act extends to the whole of the United Kingdom.
(2) This act will come into force at the start of the 2020/2021 financial year, i.e. 1st April 2020.
(3) This act may be cited as the Value Added Tax Act 1994 (Amendment) Act 2019.

NotesLink to legislation:
https://www.legislation.gov.uk/ukpga/1994/23/schedule/8

Currently all of the above items are listed in schedule 7a of the Value Added Tax Act 1994, meaning that 5% VAT is applied to them. The categories of items have been moved to schedule 8 Zero-rated for the following reasons:

1) Children’s car seats - Children's clothing is currently zero-rated, meaning that this Bill brings car seats in line with children's clothing. Moreover, VAT should not be charged on an item crucial for children's safety.

2) Contraceptive products - VAT should not be charged on medical products such as contraception.

3) Domestic fuel or power and Welfare advice or information - removing VAT on these products will help some of the poorest in society by reducing fuel bills and the cost of any welfare advice and information.

4) Energy-saving materials: installation and Heating equipment, security goods and gas supplies: grant-funded installation or connection - this again will help some of the poorest households, reducing the installation costs of energy-saving materials, thus making installation more affordable. In turn, use of energy-saving materials in the home will result in more energy efficient homes, reducing energy bills and helping the environment.

5) Women's sanitary products - women should not have to pay for products which are of a medical necessity. Removing VAT on these products will also help alleviate 'period poverty'.
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username8408717
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Someone help me choose
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Connor27
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I’m all for cutting VAT, even if it is only a baby step.

Aye.
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Mr T 999
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Nice to see a limp dem bill finally in the house. How much will this cost? This is not going to be cheap to make all those zero rated especially fuel.
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CatusStarbright
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Was this not an EU competency thing? I remember reading something about that with regards to the 'tampon tax'.
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barnetlad
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Whilst in theory I would support this, as we are here in TSR land remaining in the EU, I think the agreement made by Margaret Thatcher that VAT cannot be removed once applied still stands. Directive 2006/112/EC apparently covers this.

This I think does not stop the provision of free contraceptives or tampons, grants towards car seats, insulation grants, or some other measures which could have the same net effect
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ns_2
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(Original post by CatusStarbright)
Was this not an EU competency thing? I remember reading something about that with regards to the 'tampon tax'.
They narrowly passed a non-binding 'resolution' urging Member States to dispense of 'tampon taxes'.
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I certainly support this, removing the presence of VAT in vital areas such as contraception and sanitary products as well as having the areas impacted be ones which will genuinely help people.
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Mr T 999
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(Original post by barnetlad)
Whilst in theory I would support this, as we are here in TSR land remaining in the EU, I think the agreement made by Margaret Thatcher that VAT cannot be removed once applied still stands. Directive 2006/112/EC apparently covers this.

This I think does not stop the provision of free contraceptives or tampons, grants towards car seats, insulation grants, or some other measures which could have the same net effect
In TSRland we are not in the EU because of the Canon amendment.
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CatusStarbright
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In which case, having dispensed of the EU issue, I agree with all of them except for iii) and v) which I hesitate on a little. What is the current level of VAT for these items?
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TheRadishPrince
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(Original post by CatusStarbright)
In which case, having dispensed of the EU issue, I agree with all of them except for iii) and v) which I hesitate on a little. What is the current level of VAT for these items?
If I read the notes correctly they are all placed in Schedule 7a currently, so 5%.
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Saunders16
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(Original post by Mr T 999)
In TSRland we are not in the EU because of the Canon amendment.
I thought we were in the EU but can pass laws contrary to EU law?

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(Original post by barnetlad)
Whilst in theory I would support this, as we are here in TSR land remaining in the EU, I think the agreement made by Margaret Thatcher that VAT cannot be removed once applied still stands. Directive 2006/112/EC apparently covers this.

This I think does not stop the provision of free contraceptives or tampons, grants towards car seats, insulation grants, or some other measures which could have the same net effect
Isn't there something in our constitution about not being able to restrict future legislation? Thatcher's agreement therefore falls foul of that and would thus be irrelevant to this item:question:
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I’ll vote Aye for this, VAT is regressive and whilst it’s not feasible to get rid of it entirely, (2012 Chancellor Jarred is shouting from his libertarian tomb rn) it is good to be able to reduce it on some areas that hurt the poor the most.

I do however have reservations about cutting it on fuel. This is not enough to change my vote. But I think we should be discouraging activities that endanger the environment. Taxes on negative externalities are highly efficient and are to be commended. In the case of fuel, it might also be very regressive to keep these in place, but that’s just why we need to invest properly into public transport to help mitigate that.
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(Original post by Mr T 999)
In TSRland we are not in the EU because of the Canon amendment.
Yeah, this isn't the case. We leave on the same day that the RL UK does. (And actually when that happens, it won't be anything to do with the Canon Amendment, but a separate amendment to the Referendums section of the GD.)

(Original post by Saunders16)
I thought we were in the EU but can pass laws contrary to EU law?

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Yep, the Canon Amendment is still in force: 'Acts of Parliament or EU laws passed in real life will apply to the Model House of Commons, so long as they do not contradict bills passed in this House.'
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CatusStarbright
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(Original post by TheRadishPrince)
If I read the notes correctly they are all placed in Schedule 7a currently, so 5%.
Ah yes, I see that now thanks. Oops.
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Jammy Duel
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*cough* EU means this isn't allowed
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04MR17
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(Original post by Jammy Duel)
*cough* EU means this isn't allowed
In what way? Given that the Speaker has said MHoC can override EU law:question:
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Jammy Duel
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(Original post by 04MR17)
In what way? Given that the Speaker has said MHoC can override EU law:question:
In the way that the rules are idiotic and make EU membership absolutely meaningless when we have speakers that allow us to out and out break the rules. There does also remain the irony that those who are annoyed with the government for keeping VAT on certain items also generally want to stay in the EU, the people actually causing the VAT to be there.

That aside VAT should be made simpler rather than shuffling items about
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If a lower or nil rate of VAT on electricity is permitted, possibly because the UK commits the act of economic self-harm that is called Brexit, then I would advocate it only applying to electricity from renewable non-fossil fuel sources.
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