Thread by @GeorgePeretzQC

This is an important point on VAT post Brexit: that chancellors may well yield to pressure to extend exemptions and zero rates, reducing the VAT base.

https://twitter.com/delaferiar/status/1442073638543441922

NB too though that Brexit offers scope for tidying up often bizarre rules on food (biscuits/cake; crisps made from potato) without extending VAT to more food (something chancellors have been reluctant to do).

All though complicated by the NI Protocol, where the VAT directive still partly holds: change GB rules and the Irish Sea barrier gets that little bit higher.

PS to a large extent, oddities and rough edges in the tax system are the price you pay for democracy, even though they drive practitioners (lawyers and economists mad).

One very fair criticism of the EU is that changing VAT law in response to changes in technology or peculiar court rulings is far too hard. You perhaps get a somewhat more rational system as a result, but at a price in democratic legitimacy.

That said, the reason why changing EU tax law is so hard is that certain Member States (looking at you 🇬🇧, though see also 🇮🇪 and 🇱🇺) were determined to keep it hard.

And NB too that the way in which we actually make tax law, with many important changes bounced on the cabinet, let alone Parliament, at no notice, is distinctly sub-optimal and often minimally democratic.

I agree - more excellent opportunities for tidying up.

https://twitter.com/VatDaddy/status/1442103554739564547

NB too that pretty much all varieties of Brexit deal - including EEA - meant leaving the scope of the VAT directive. So the current government can’t point to these features as particular advantages of its choice of Brexit.