|
Trade News Archive November 08 October 08 September 08 August 08 July 08 June 08 May 08 April 08 March 08 February 08 January 08
Subscribe to our newsletter Go to The Wholesaler UK Directory
24th November 2008
Chancellor cuts VAT to 15%
Chancellor Alistair Darling has announced an historic cut in the UK's VAT rate in a bid to encourage consumers to spend more money.
In news that will have far reaching effects throughout the nation's retail sector, Mr Darling announced a 2.5 per cent cut in rates until the end of 2009 during his pre-budget report.
The temporary cut, from 17.5 per cent to 15 per cent, brings the UK's VAT to the lowest level allowed by European law at a potential cost of billions of pounds to the government.
Although economists believe that the new rate, set to be introduced from Monday (December 1st), will be attractive to consumers and could save them a substantial amount if they choose to spend, not everyone is so keen on the idea.
Speaking to the Evening Standard, an unnamed retailer said that the VAT cut would be a logistical "nightmare" on the high street, causing chaos for businesses forced to re-price their entire stock for tiny reductions.
Another retailer told the newspaper that the recent spate of discounts of up to 25 per cent by retailers, meaning that an extra £2.50 in every £100 spent would make little difference.
Mr Darling also announced a new 45 per cent income tax interest rate for high earners and a 0.5 per cent increase in national insurance. He projected a peak in public sector borrowing of £118 billion next year.
(c) 2008 Adfero Ltd.
Comment on this news story
|
