British rebate
- Fontainebleau castle (Photo: www.en.parisvision.com)
The European Summit in Fontainebleau in 1984 agreed a special refund (rebate) for Britain from the Community budget. British Prime Minister, Margaret Thatcher, wanted "her money" back - and she got it. The British rebate is fixed every year as a reduction in the VAT contribution for the following year.
The rebate will continue after the enlargement of the EU. The poorer applicant countries will have to pay their share of the British rebate. During the accession negotiations Poland requested not to have to co-finance the rebate for 2003. This request was refused.
The rebate was seen as compensation to the UK for the Common Agricultural Policy which is expensive for British tax payers and consumers and from which the UK receives only a small benefit.
The EU Parliament has no influence over the income component of the budget - only on expenditure.
