Don’t expect a rebate cheque

Graham Martin-Royle (8/4/16) over-simplifies Britain’s payments to the EU.

We do not receive a £9bn bill (nett of rebate and EU funding) on December 31, but we tax-payers do pay gross to the UK to pay the EU over 12 months.

When we leave, that will (nearly all) directly benefit Britain.

The ‘true’ figures are elusive (ONS, Treasury, CER and Eurostat all differ), but Britain pays annually ‘about £20bn gross to EU institutions and the EU Budget’ (ONS).

The ‘iffy’ £350m per week better represents the magnitude of EU membership fees.

Norway only pays about £6.8m per week for full EU access (EU projects, admin, voluntary EEA grants... it does not contribute to the EU budget).

Non-EEA Switzerland pays about £1.9m per week (CER): per capita, that’s £1.40 per week versus our £6 per week.

The ever-rising EU budget (largely CAP) is apportioned between 28 EU members (calculated by GNI) with Britain contributing ‘about’ £18bn gross, collected monthly in arrears from import duties and VAT receipts with the balance two months in arrears from general ‘gross’ UK taxes.

Our reducing ‘about’ £4bn rebate comes from 27 other EU national budget contributions; Britain likewise part-funds four national rebates.

The rebate is not deducted up front, but is calculated at year’s end and credited against next year’s contributions: hence £18bn gross, less £4bn ‘rebate’ equals £14bn nett in year two.

The variable £5bn ‘Free EU Funding’ also comes from budget contributions (mainly ours) but is paid-out as the EU dictates (often requiring UK part-funding) quite separately, a year in arrears.

This is not deducted from budget contributions yet pro-EU campaigners regard this as a ‘refund’, hence their misleading creative accounting: £14bn nett less £5bn funds = £9bn ‘nett of nett’.

Still confused? Well, if you buy a £10 box of chocolates which contains a £1 coupon against your next purchase, do you pay the shopkeeper £10 or £9?

And when you pay £5 EU import duty ‘dock-side’ on a Chinese-made widget, don’t expect a £1.10p ‘adjustment nett of UK rebate’ refund!

We tax-payers never get refunded – so don’t expect a £4bn rebate cheque when we leave!

Barry M Jones

Bixley Lane


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