In a statement to the House of Commons on 21 March 2016 about the conclusions of the March EU Council meeting (17-18 March), the Prime Minister highlighted an “important breakthrough” on VAT zero rating rules. He said that the Council’s conclusions confirmed that the European Commission would produce a proposal in the next few days to allow countries to extend the number of zero rates for VAT.

While its main focus will be on the UK being able to introduce a zero rate for sanitary products, it also indicates the general direction of travel for such rates and suggests that the Government might soon be granted greater flexibility in creating zero rates – but also in getting rid of them.