Dermot Gaffney

‘The only way rates are going to go is up' DERMOT GAFFNEY

In the mid-1970s, the Labour government introduced a new luxury rate of 25 per cent which was applied to items such as TVs, hi-fis, furs and jewellery.This was scrapped in 1979.
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Dermot Gaffney, an indirect tax partner with the accountant KPMG, said: "The public perception is that VAT is very high.In fact, we have one of the lowest rates in Europe.But the reality is there is bad news coming.With the drive towards harmonisation across Europe, the only way rates are going to go is up.

"We saw that last year with Germany increasing their rates from 16 to 20 per cent.I suspect somewhere around the 20 per cent mark might end up being the average.

Article by Dermot Gaffney, indirect tax partner, KPMG.This article appeared in the December 2004 issue of Tax Adviser. Dermot Gaffney reviews the decision of the ECJ in the case of Climber Air.

Dermot Gaffney, indirect tax partner at KPMG, said: "The industry has always been against this measure.

Dermot Gaffney, indirect tax partner at KPMG, said: 'The £3million fund will not go far in alleviating their concerns over the inevitable costs of the disruption to their bottling and packaging processes.'