Call for Common Sense on Food VAT Pricing

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Call for Common Sense on Food VAT Pricing

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Under current British tax rules, consumers pay no VAT on "essential" foods and drinks but must pay 20% on "luxury" items such as smoothies, ice cream, and "gingerbread men decorated with chocolate unless this amounts to no more than a couple of dots for eyes". The set of rules which dictates whether a product is taxed or not was created in 1973. It is archaic, arbitrary, and unfair. For example, smoothies made uniquely of fruit are subject to VAT at full rate when less healthy food such as burgers, chips and doughnuts are sold tax-free. We request that the government makes HMRC take a closer look at its taxation on foods. This should create a more modern, clearer, and fairer tax system which, perhaps, takes into account the externalities associated with the consumption of all major food products.

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