Would Brexit mean cheaper fuel bills for Brits? That’s the claim made by Boris Johnson and Michael Gove today, who say that leaving the EU would let ministers get rid of VAT on gas and electricity. With all the bunkum being banded around over the referendum, it’s fair to say that the Brexit campaign do partly have a point on this. Under EU law, the UK is not allowed to charge less than five per cent VAT on fuel and power supplies. Boris argues as much in The Sun today: ‘Fuel bills will be lower for everyone,’ he says.
So it seems that leaving the EU would hand back an element of control on this point, with no European Union country having complete freedom to set its VAT rates. Consequently, ever since 1994, domestic supplies of fuel and power have been liable for VAT under EU law.
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