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From jaffa cakes and gingerbread men, to fur skin coats and children's clothes, our VAT system and its byzantine rules seem, on the surface, to be a fun quirk of the UK tax system.
But dig deeper, and one finds economic distortions and inefficiencies due to the complex way the UK's third largest tax is levied.
Leading us through this maze of complexity are Helen Miller, IFS Deputy Director and tax expert, and Dan Neidle, a tax lawyer and founder of Tax Policy Associates.
Zooming In: discussion questions
Every week, we share a set of questions designed for A Level economics students to discuss, written by teacher Will Haines.
1. Using an example, explain the challenge in identifying goods which are and are not subject to VAT.
2. Why is removing VAT from certain goods not the most effective way of redistributing income?
3. Having listened to this episode, what changes would you make to the current VAT system and how effective do you think they would be?
Host
Paul Johnson
Paul has been the Director of the IFS since 2011. He is also currently visiting professor in the Department of Economics at University College London.
Participants
Helen Miller
Helen is Deputy Director of the IFS and Head of the Tax sector.
Dan Neidle
Dan Neidle is a British tax lawyer and commentator, who researches and writes on issues of tax law and tax policy. He founded Tax Policy Associates, a non-profit which advises policymakers and journalists on tax policy.
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