A high street retailer has called for a cut in the 20% VAT on its child sun cream. What struck me as a tax barrister was that the government is not totally able to move a particular product around between different VAT rates at will. Instead what can be sold at the 5% reduced rate is set out by European law and the zero-rate cannot be extended. As it happens the same products also have a profit margin up to 40%.
Tax Barrister, Accountant