§ Sir Teddy TaylorTo ask the Chancellor of the Exchequer when the United Kingdom's entitlement to levy VAT at zero rates ended; what powers the Government are exercising to continue zero rates; and if he will seek an assurance from the Commission that it will not challenge these powers in the European Court. [975]
§ Dawn PrimaroloThe United Kingdom is entitled to continue applying its existing VAT zero rates. Our zero rates are expressly provided for in EC law under Article 28(2)(a) of the Sixth VAT Directive. This provision is linked to the duration of the 'transitional period', but this continues automatically until such time as any 'definitive' VAT regime is introduced, which would require the unanimous agreement of all Member States. In light of this there would be little to be gained from seeking any assurance from the Commission on the issue.
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