Commentary

V1.131 Power to change the rate of VAT in the UK

Part V1 General principles and rates of tax

V1.131 Power to change the rate of VAT in the UK

V1.131 Power to change the rate of VAT in the UK

The rate of tax may be changed either by statute or by Treasury Order (but see 'The 'VAT lock' (November 2015 to June 2017)—changing the rate of VAT in the UK' below). Different considerations apply to each.

Statute—changing the rate of VAT in the UK

The Provisional Collection of Taxes Act 1968 applies to VAT1. Briefly, this means that the rates at which tax is charged may be varied by a resolution of the House of Commons2, and such resolution has effect for a period of seven months3 provided that, within 30 sitting days following the passing of the resolution4 either:

  1.  

    •     a Bill for that purpose receives a second reading within 30 days

  2.  

    •     a Bill is amended so as to include provision for the renewal, variation or abolition of the tax

A resolution ceases to have effect when its provisions are rejected during the passage of the Bill, or where Parliament is dissolved or prorogued (ie the parliamentary session comes to an end). However, with effect from 30 December 2011, it may survive prorogation where the following apply:

  1.  

    •     A Bill renewing, varying or abolishing the tax is read a first time by

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial