VAT on fuel in Northern Ireland cannot be cut due to the NI Protocol

A letter from Colin Berry:

Friday, 14th January 2022, 4:00 am
Updated Friday, 14th January 2022, 4:03 am
EU legislation deems 5% the minimum rate of VAT, which is the existing UK rate on energy and so it cannot be cut in Northern Ireland

With increasing scrutiny and pressure on the cost of living, we should bear in mind the implications of Article 8 of the Northern Ireland Protocol, which deems the province within the European Union rules for VAT and excise.

The broadcaster and economic commentator Liam Halligan’s campaign Scrap the VAT (on Energy Bills), supported by the UK Labour Party, while only offering the average British punter £100-150 saving per year, is a measure to aid ordinary people with everyday expenses.

But it could not apply in Northern Ireland, because existing EU legislation deems 5% is the minimum threshold VAT can be levied, which itself is the existing UK rate on energy and so it could not be cut here.

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Letter to the editor

VAT itself disproportionately punishes the poorest in society and any reversal benefits low earners and low income families more than any other demographic.

Can MPs such as Stephen Farry, Column Eastwood and Claire Hanna offer an alternative to the reduction in VAT on energy bills that benefits ordinary people?

Are they prepared to back the opposition in calling for a pan-UK reduction in living costs or will they yet again demand a rigorous implementation of a protocol that legislatively limits the positive impact a nation state can have in helping ordinary people with their everyday lives?

Colin Berry, Belfast BT5

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