I understand the working of VAT as it applies to businesses but it's never occured to me to wonder where it goes to.
Is it just added into the general taxation pot and treated like any other stream of government revenue or does it (or a portion of it) go direct to the EU?
If it doesn't go to the EU then I assume that we give money to the EU via some other mechanism; what is it?
Thanks for any enlightenment.
It goes to the general taxation pot.
I believe part of our contribution to the EU budget is based on VAT receipts.
it goes to the EU for the betterment of our living. its good that we pay that. atleast we are happy that we are getting good roads and other facilities coz of them
Vik
You are having "A little joke" with us -yes ? :)
Derek
The prick returns!
LOL!
Here:
the EU has produced a long layman's explanation of how it all works but I cannot actually find i nit a statement in there about where the VAT actually goes. It says it is paid "to the revenue authoriities" but it does imply that it goes to the EU in a short sentace near the bottom:
"It was not until 17 May 1977 that the Sixth VAT Directive was adopted which established a uniform VAT coverage. This guarantees that the VAT contributed by each of the Member States to the Community's own resources can be calculated."
Robert
If you understand the working of VAT, as you claim, then you should know whether a business pays all the VAT to HMRC or some of it is paid directly to some entity in Brussels.
If you understand the working of VAT, as you claim, then you should know whether a business pays all the VAT to HMRC or some of it is paid directly to some entity in Brussels.
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No it doesn't work like that.
The business pay all of their VAT to HMG, HMG then give some of it to the EU
tim
but what proportion of it is given to the EU? It seems such an important and interesting question that it seems odd that nobody has yet come up with the answer.
Robert
From what I can see, it is approx 0.33%, but it is adjusted for things like our zero rating of food, books and children's clothes. Then we also get our Maggie Thatcher negotiated rebate to take into account the fact that we get very little money back from the Common Agricultural Policy.
Do you have a reference for that figure? It is often said that the EU contribution is related to GDP but I suupose that VAT is related to GDP so that would fit.
Robert
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