Food: VAT

Treasury written question – answered at on 1 August 2022.

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Photo of Lord Taylor of Warwick Lord Taylor of Warwick Non-affiliated

To ask Her Majesty's Government what plans they have to reduce VAT in response to rising grocery Bills.

Photo of Baroness Penn Baroness Penn Baroness in Waiting (HM Household) (Whip)

VAT has been designed as a broad-based tax on consumption, and the 20 per cent standard rate applies to the vast Majority of goods and services. While there are exceptions to the standard rate, these have always been strictly limited by both legal and fiscal considerations. One exception is the zero-rate of VAT the UK applies to many foods, including fresh fruit, vegetables, cereals, meat, bread, milk, tea, and coffee, to help ensure food is affordable for families.

VAT makes a significant contribution to the UK public finances, being forecast to raise £135 billion in 2021-22 and helping to fund key spending priorities. Any reduction in tax paid is a reduction in the money available to support important public services, including the NHS and policing. The Government keeps all taxes under review.

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