What is the appropriate act to mark the fiftieth anniversary of Value Added Tax in the UK? Are we celebrating? Surely not. Are we mourning? If only. But we should at least pause and reflect on the central role that VAT has played in our recent economic history.
The third largest source of tax revenue, forecast to deliver over £160 billion to the Exchequer this year, VAT has always been a cash-cow, but never without complaint. Most of the debates surrounding its introduction in 1973 focused simply on who and what should remain outside its claws.
If you want an indication of what a different world this was, just look at Anthony Barber’s explanation to the Commons of the risks that the zero rate for children’s clothing could be misused.
‘Unfortunately’, he began, using language surely racily provocative even back then, ‘it is no part of my responsibility as Chancellor to add to the many advantages already enjoyed by slim and nubile young women.’
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