History of VAT that you probably don’t even know about!!

VAT is a very lengthy topic; some of its pros you like, some cons you don’t, and when it is about its facts, you don’t even know. Value added tax is serious, but let’s make it funnier. Let’s explore the facts which will expand your general knowledge. In this small, straightforward blog we will be learning some hidden points to disturb VAT.

▶ The Jaffa Cake Court Battle

The UK faced a court case for deciding if the Jaffa cake would pay VAT or not – you would be thinking, ‘Why?’ Let me tell you. The main direction which got noted was that if it is hard like a biscuit or is soft like a cake, the cake is VAT-free, but the biscuit is not. The conclusion which we got was that it is a cake.

▶ VAT Was Once Almost Rejected by the UK

While the European Economic Community joined in the UK debate, most of the people called it a continental trick and took it as a heavy French tax on the United Kingdom’s economy. Somehow it got passed and now became the most beneficial tax.

▶ Carousel Fraud (Missing Trader Fraud)

Carousel fraud is one of the biggest scandals which the UK government handled. Basically, some groups bought the goods that were VAT-free and then sold them with VAT, which caused a huge loss of billions to the UK government.

▶ The RATE WAR

European countries, including France, Italy and Germany, wanted to make one single rate rule of VAT for the whole world, but here the UK didn’t agree, as it wanted to make zero taxes on children’s clothes and food items to help its economy live a cheaper and easier life. Only because the UK played a valid victim card for its children did the EU finally allow that some minor VAT rules can be changed.

▶ COLD

The United Kingdom’s government has made ice cream VAT taxed and frozen yoghurt & frozen mousse not; a common dessert shop titled its ice cream as a frozen mousse for not paying Value Added Tax. Now HMRC had to test it; while this was going on, it became viral, and many memes were made on Reddit (2017).

▶ VAT Is Older Than Credit Cards but Smarter Than Many Modern Systems

Credit cards were introduced in 1950, and just four years later VAT was introduced, but it is still better than all the other tax-related systems. The IMF claimed that it is the best ever TAX invented, and really it is only complicated in some points and smarter in all points if you manage to learn it.

Conclusion

VAT is funny. VAT is easy. VAT is simple. At the end VAT is just a small term which you have to understand for your business; it is your choice whether you learn it easily or overthink and make it complicated. If you think wisely and calm down, you can control your finance matters slightly. For wiser choices, you can see our other guides directed on our guides page.