VAT rate rises from 17.5% to 20%

[Curlyben]

The top rate of VAT has risen from 17.5% to 20% as the government looks to boost tax revenues to cut the UK's debt levels.
Business groups have warned that retailers will be hit by the increase, while opponents of the rise have said the poorest will be hit hardest.
The government says the rise is necessary to help bring down the UK's high budget deficit.
Food, children's clothing, newspapers and magazines are not subject to VAT.
BBC News - VAT rate rises from 17.5% to 20%





So VAT has increased, but how much will it really affect YOU ?
OK so Fuel, booze and fags will be hit hardest, at least from the everyday perspective. Fuel is already painful, so I hope we have been working on mitigating that anyway. Fags and booze, well it's the old cut down (out) or get it from Foreign Parts.


Bear in mind food is zero rated, but WILL increase due to the whole supply chain costs.
Overall I feel it will be a slow increase with alot of retailers making claims they are holding the VAT rate. Bit like BG claiming they are the cheapest when they "lower" utility prices by a few pence.


The biggest increases will be around April and the new Tax year when the "improved" tax codes are released. Why, well as everyone (almost) will have a couple hundred quid extra in their pockets the increases wont be felt as badly.


So there you go, that's what I think, but we'll have to wait and see..
Time to check your lifestyle and see how it will actually affect you personally.

[TUTTSI]

Re: VAT rate rises from 17.5% to 20%

Not everything in the supermarket is zero rated, things like loo rolls, paper towels and many other items do attract VAT in any event.

The cost of delivering goods to the supermarket the 'Diesel' has gone up vastly so you can also expect cost of goods to generally increase accross the board to go up as a result. This is the hidden costs which they will add to our supermarket bills accross all items. Maybe not by 2.5% but pennies here and there.

So expext the bills to start rising.

[enaid]

Re: VAT rate rises from 17.5% to 20%

VAT explained plus a calculator to work out what you will or should pay extra.



BBC News - Budget: How the rise in VAT will work

[Jester]

Re: VAT rate rises from 17.5% to 20%

Personally, I think the VAT increase will have far more reaching consequences. It'll cause many small retailers to go out of business as people cut back on what they spend because they don't have the money.

We will also see a lot more pubs disappear. Most landlords I have spoken to (and remember I do a lot of work in pubs) are already struggling. Many were saying before Xmas that if things did not pick up over the festive period then they would be forced out of business in the New Year. Well, most pubs in my area were indeed quiet over the festive period. Even NYE was quieter than usual. Now, with the price of beer rising even higher, those same pubs will find they have even less customers as people go out far less frequently and spend far less when they do go out.

The knock-on effect is pubs closing, potential (albeit part-time) employment also disappears out of the window.

The only place you will find pubs before long is in the City centres !!