Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential effect on consumer spending of reducing the rate of VAT during the covid-19 outbreak.
VAT raised £130 billion in revenue in 2019/2020 for the Exchequer and plays an important part in funding the Government’s spending priorities, including hospitals, schools and defence.
Reducing the standard rate would come at a considerable cost to the Exchequer. However, the Government keeps all taxes under review.
In response to the COVID-19 outbreak, the Chancellor has announced a range of measures to help individuals and businesses through the crisis, including grants, loans and relief from business rates worth more than £300 billion.