Shoppers get extra time over VAT rise
January 17, 2010 by admin
Filed under News, News Utilities
As most people are already aware the start of this year kicked off with the level of VAT being put back up to its original level of 17.5 percent. The level of VAT was reduced by the government last year from 17.5 percent to 15 percent in the hope that this would help consumers to save money, improve finances, and kick start the economy. However, the measure was a temporary one that has now come to an end, which means that in most places prices will now include VAT at 17.5 percent.
However, whilst the VAT rate may have increased back up to its original level shoppers that go to some retailers will be able to enjoy the reduced level of VAT for a while longer, as a number of big name retailers have said that they will continue to offer goods at the temporary 15 percent VAT level for a while longer enabling consumers to save a little more cash on their purchases.
Department store John Lewis has stated recently that it will be waiting until the end of January before adding the additional 2.5 percent onto the price of its goods, and a number of other retailers have also said that same. Asda has said that that it will be adding the VAT increase to the price of its clothing range as the spring fashions start to arrive throughout the month rather than doing it from the start of January.
It is thought that the VAT increase will net the government around £12 billion, but some industry officials are concerned that increasing VAT back to its original level will dent consumers confidence before the year has even got underway, and could make for another very challenging year for both consumers and for the economy.
Tags: Value added tax, Asda, john lewis, Tax reform, Taxation