Euro-MEPs in Brussels last week rejected a proposal by the European Commission to impose the full VAT rate on children's clothes and shoes sold in the UK.

Children's clothes are zero-rated for VAT in Britain, but under plans by the European Commission to harmonise value added tax rates across the EU, they could be subjected to a levy of up to 17.5 per cent.

The issue is being put to Europe's finance ministers at talks later this month.
Theresa Villiers, Conservative MEP, said: "We have now secured cross-party support in the European Parliament to keep children's clothes free of VAT.

"The British Government must fight for the same result when finance ministers vote on this is the European Council of Ministers."

If the European Commission's plan to impose VAT on children's clothes is accepted, families could see their annual average household expenditure on children's clothes and shoes jump to almost £250 from the current spend of £208.