VAT Raise Producing Misery for People across Britain
In a time where lots of people are still struggling to guarantee full or part time work and others finding themselves all of a sudden unemployed, more of our salary being taken couldn’t have come within a worst time period. The increase also seems to be set to hit those who are currently considered to be financially vulnerable the hardest.
With the Guardian reporting that “(The) VAT rise from 17.5% to 20% will cost each household around ?520 a year” and Ed Milliband, Leader of the Opposition arguing that the tax increase could cost typical families around ?7.50 each week, the future appears to be pretty bleak for shoppers.
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 behind this is that some of that cost is already Value Added Tax: the new rate will only be charged on the cost before VAT is applied.
For example, a teddy that might have cost you ?9.99 at 17.5% VAT would currently set you back ?10.
In most cases, this means that something that 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 worry! Only some goods will be affected. Absolutely essential purchases such as children’s clothing, food and also magazines are left at 0% VAT and items including electricity and gas are at 5% VAT.
The goods that will be charged at 20% VAT would be things such as televisions, takeaways, bikes and teddies. However, for regular pub goers, you might find that that your standard pint may be increased by as much as 6p!
What does this VAT increase mean in my situation being a road or train user?
. Unfortunately for car owners, there has been a double whammy of increases. The shared effort of an increase in fuel duty as well as the price of crude oil is the reason why the average cost of a litre of unleaded fuel has been pushed to ?1.24, while diesel will be costing typically ?1.28 per litre. In many parts of the country fuel is as high as ?1.45 a litre.
. If your choice of public transport is by train, you may have already spotted a great deal of fare raises following the New Year. The average passenger could find that their train ticket has gone up an average of around 6.2%. Then again, the government is telling us that the rise will 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 quite challenging to stay away from the VAT rise as it’s something that is immediately added to all purchases. However, be weary of a handful of restaurants that include it on the end before you pay, with some restaurants displaying the final cost with VAT in fine print so that you think that you are spending less than you are.
Although there are a few things you can’t help buying, there are several items that are affected by the VAT rise that you shop for which you may not essentially require. So if the additional pennies being included with your daily tea total means that you decide that you don’t actually need it, you could potentially not just save money on the VAT, you might find these small alterations to your spending habits could save you money in the long term.
Since the Value-Added Tax increases, some individuals could find themselves having difficulties after the christmas celebrations.
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