Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the compatibility of changes to VAT legislation with the principal of fiscal neutrality.

Fiscal neutrality is a key feature of the VAT system, and helps to ensure market distortions are minimised by equalising the tax treatment of supplies which are identical or sufficiently similar from the point of view of the consumer.

When changing VAT legislation the Government considers issues of fiscal neutrality as part of the policy making process.