There has been a lot of criticism of Prime Minister Gordon Brown's Chancellor Alasdair Darling's cut in VAT from 17.5 per cent to 15 per cent. Whilst there have been quite significant reductions in the shops and by suppliers of, for example building materials, this reduction is important.
Unfortunately, the Chancellor plans to not only remove the reduction from its present 15 per cent sometime in the future but also to claw back that loss in tax by increasing VAT to 20 per cent!
I am pleased to have a reduction of two and half per cent on the cost of my purchases. This reduction, applies of course, to products that are possibly already reduced. So it is not to be sneezed at!
The future increase in VAT means that one fifth of most of what we buy will go to the Exchequer! I personally resent paying this tax anyway. No matter what your income you have to pay a substantial amount of the purchase price of a product as a tax. For the effect of VAT on fuel see petrolprices.com
Are we just a load of mugs? The cartoon below is republished under a creative commons license from Matt Buck's Cartoon Diary. Matt's website
This work is licenced under a Creative Commons Licence.