Veterinary Services: VAT

VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. Tax breaks reduce the revenue available for 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.

One of the key considerations for any potential new VAT relief is whether the cost saving is likely to be passed on to consumers. Evidence suggests that businesses only partially pass on any savings from lower VAT rates, meaning that cutting VAT may not be an effective way to reduce prices for consumers.

The Chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances. Since taking office the Government has taken a number of decisions on tax, welfare, and spending to fix the public finances, fund public services, and restore economic stability. This stability is critical to boosting investment and growth, and to making people across the UK better off.