§ Lord Stoddart of Swindonasked Her Majesty's Government:
What obligations are placed upon the United Kingdom to harmonise VAT rates and exemption policy by the Sixth Value Added Tax Directive of the European Community.
§ The Secretary of State for Employment (Lord Young of Graffham)The Sixth VAT Directive places no obligation upon the UK to harmonise VAT rates. As for exemptions, the directive specifies those activities which are to be exempt from VAT. However, under transitional arrangements member states may derogate from these provisions by taxing certain transactions which should be exempt and, conversely, by exempting certain transactions which should be taxable.