David Cameron has vowed to resist plans by the European Union to bar Britain from waiving VAT on food, medicine and children's clothing, a senior EU official said.
Pierre Moscovici, the Economics Commissioner, said that Britain's "zero rate" for VAT on a number of items is "not the best idea" and suggested it will be looked at as part of a review by the European Commission.
It will fuel controversy as David Cameron holds a series of meetings as he prepares to call a referendum on Britain's continued membership of the of the European Union.
Mr Moscovici was asked about about Britain's "zero rate" exemption from European rules which state that the minimum rate of VAT must be 5 per cent.
Pierre Moscovici, European Commissioner for Economic and Financial Affairs
"We will have to reassess everything," he said. "Zero rate is not the best idea."
However Britain will have the right to veto any proposal to scrap the zero rate. The Prime Minister's Official spokesman on Thursday: "We have always been clear where we stand on that front."
The dispute could increase pressure on Mr Cameron from Eurosceptics Tory MPs who want to quit the EU.
Three months ago, anti-EU campaigners seized on the government's inability to waive VAT on tampons due to EU rules to call for "Brexit" in the referendum that could come as early as June.
Mr Moscovici this morning attempted to row back on his comments, saying it is "far too early" to say what the measures will be.
Last year, EU judges ruled that e-books could not benefit from lower VAT charged on paper equivalents because they were not enshrined in a law drawn up before they were invented.
EU states must levy VAT of at least 15 per cent, but can go as low as 5 per cent on items on the EU "reduced rate" list.
Moscovici said the EU could draw up a new list or states could be allowed to draft their own, in a move that would give them more leeway in choosing goods benefiting from a lower tax rate.
http://www.telegraph.co.uk/news/worldnews/europe/eu/12126569/EU-VAT-review-could-end-Britains-exemption-on-food-medicine-and-childrens-clothing.htmlDear EU, change your E to an F, there's a good lad.
WE DON'T PUT VAT ON STUFF NEEDED FOR SURVIVAL!
End of story.
