Industry: VAT
The question
To ask the Chancellor of the Exchequer, if she will conduct a review of the VAT system as it applies to (a) the hair and beauty sector and (b) other labour-intensive industries.
Answered by James Murray
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is also the UK’s second largest tax, forecast to raise £180 billion in 2025/26.
Tax breaks reduce the revenue available for vital public services and must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations.
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