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SNP Euro-MP Ian Hudghton has welcomed the European Parliament's backing for plans to extend a scheme that allows Poland and the Czech Republic to apply special reduced VAT rates on labour intensive services. Mr Hudghton is a member of the Parliament's Economic and Monetary Affairs Committee and Parliament's 'Rapporteur' on the issue - the MEP charged with co-ordinating the European Parliament's response to this matter.
The scheme allows EU member states to apply reduced VAT rates for certain labour intensive services. Poland, for example, choses to apply a reduced rate to small industries like bicycle and shoe repair shops (VAT at 7% instead of 22%), and the Czech Republic uses the scheme to help the cleaning and domestic care sectors (5% instead of 19%).
Mr Hudghton said that extending the scheme would secure equal treatment for the new member states and also boost attempts to keep the principle of reduced VAT rates for certain products and services across the EU. The SNP MEP is an opponent of plans to abolish the UK's right to apply reduced VAT to products like children's clothes and shoes which would unfairly penalise parents and children.
A copy of Mr Hudghton's report, approved by today's meeting of the European Parliament's Economic and Monetary Affairs Committee is available at http://www.europarl.eu.int/meetdocs/2004_2009/documents/PR/543/543085/543085en.pdf
Speaking from Brussels, Ian Hudghton MEP said:
"It's important for the European Parliament to put on record its support for the principle of applying variable rates of VAT in areas of common interest and social need . This vote is not just good news for Polish bike repair shops or Czech cleaners, it reemphasises our support for the principle of social taxation at a time when this principle is not exactly in fashion with many European leaders."