BID TO CUT VAT ON ICE CREAM

A campaign to reduce the cost of British ice cream has been thwarted by Brussels bureaucrats.

UK ice cream manufacturers and sellers had urged Chancellor George Osborne to remove or reduce VAT on the country's favourite treat. The move came from trade association The Ice Cream Alliance in the face of swingeing increases in the cost of ingredients, energy price rises and the hike in VAT. But HM Revenue & Customs have informed The Ice Cream Alliance that the Chancellor's hands are tied by EU law.

A spokesman said: "It is not possible to completely remove VAT from ice cream. VAT is an EU wide tax, the scope of which is set out in EU law under the terms signed by successive UK Governments with our European partners.

  "These agreements do not allow the UK to extend the scope of its existing zero rates or introduce new ones."

Zelica Carr Chief Executive Officer of The Ice Cream Alliance said she was surprised to hear the Government claimed it no longer had the power to determine domestic VAT matters.

 "The response from HMRC was disappointing. Whilst HMRC has advised that VAT is an EU-wide tax governed by EU Law - it is the UK government which has increased VAT on ice cream to 20% surely it must also have the power to reduce it. I do appreciate that the country has fiscal challenges, and that is precisely why I raised this as an opportunity for the Chancellor of the Exchequer to give a much needed boost to the ice cream industry, and in doing so to help lift the spirits of the nation. This was an opportunity to help an industry which is worth more than £1bn to the UK economy and provides pleasure to millions of people but it has been left to our ice cream manufacturers and retailers to absorb the rise in VAT and commodity prices to help keep prices down."

The Ice Cream Alliance is a not-for-profit organisation which for 60 years has been dedicated to supporting the production and vending of premium ice cream.

Its membership numbers over 600 businesses involved in every aspect of the trade including manufacturers that range from multi-nationals through to artisan producers supplying their local communities.

More information on The Ice Cream Alliance can be found at www.ice-cream.org

ENDS
Media Contact: Steve Verrill -VPR - 01430 871166 or 07803 589282