subject: VAT Increase Producing Distress for Buyers across England [print this page] VAT Increase Producing Distress for Buyers across England
In a time where lots of people continue to struggle to guarantee full or part time work and others finding themselves all of a sudden out of work, more of our hard earned cash being taken couldn't have come within a worst time. The increase also looks set to hit those who are currently regarded as being financially insecure the hardest.
With the Guardian reporting that "(The) VAT rise from 17.5% to 20% will cost each household close to ?520 a year" and Ed Milliband, Leader of the Opposition arguing that the tax increase will cost average homeowners around ?7.50 each week, the future appears to be fairly bleak for the public.
How much is the raise?
Even though the tax is increasing by 2.5%, the price you pay won't increase by 2.5%. The reason for this is that some of that cost is already Value Added Tax: the new rate will only be charged on the amount before VAT is put on.
For example, a teddy that might have set you back ?9.99 at 17.5% VAT would now set you back ?10.
In most cases, this would mean that some thing which would have cost ?100 before the tax hike, will set you back ?102.13 today.
Will all goods be affected by the VAT increase?
No, don't panic! Only some goods will be affected. Essential purchases such as children's clothing, food and magazines are still at 0% VAT and items including electricity and gas are at 5% VAT.
The products that will be charged at 20% VAT will be things for example , televisions, takeaways, bicycles and teddies. However, for regular pub goers, you may find that your standard pint may be increased by as much as 6p!
What exactly does this VAT raise mean in my situation as a road or train user?
. Unfortunately for car users, there has been a double whammy of rises. The shared effort of an increase in fuel duty along with the price of crude oil means that the average price of a litre of unleaded fuel has been pushed to ?1.24, while diesel is costing an average of ?1.28 per litre. In many parts of the country the price of fuel is as high as ?1.45 a litre.
. If your choice of public transport is usually by train, chances are you'll already have spotted a great deal of fare raises following the New Year. The average passenger may find that their train ticket has risen on average around 6.2%. Then again, the government is suggesting to us that the raise will probably shift more of the expense of rail travel to passengers in place of taxpayers more generally. Not good news if you are a passenger though!
What can I do to avoid costs?
Unfortunately, it is very difficult to stay away from the VAT rise as it's something that is immediately included in all transactions. Having said that, be weary of several restaurants that include it on the end before you pay the bill, with a few restaurants displaying the final cost with VAT in small print so that you feel that you will be spending less than you are.
Although there are a few things you can't help buying, there are a number of items which are affected by the VAT raise that you purchase that you may not definitely need. So if the additional pennies being included with your daily cappuccino total means that you decide that you don't actually need it, you could potentially not only save money on the VAT, you may find these small improvements to your spending routines could save you money in the future.
