VAT: Tax Rates and Bands

Treasury written question – answered on 23rd June 2020.

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Photo of Luke Evans Luke Evans Conservative, Bosworth

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of a time-limited reduction in VAT to support economic recovery as the covid-19 lockdown restrictions are eased.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

VAT raised over £130 billion in 2019/2020. It is a vital source of revenue for the Exchequer and plays an important part in funding the Government’s spending priorities including hospitals, schools and defence.

A temporary VAT reduction therefore would come at a considerable cost to the Exchequer.

In light of the COVID-19 outbreak, the Treasury have implemented a range of measures to help individuals and businesses through the crisis, including grants, loans and relief from business rates worth more than £300 billion.

The Government keeps all taxes under review.

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