Return to 17.5% VAT rate confirmed
22/04/2009
The Chancellor has today reiterated the announcement he made in the PBR that the standard rate of VAT would return to 17.5% from 1 January 2010.
Baker Tilly analysis
This will be very disappointing news for retailers who had hoped that lobbying by their representative bodies would result in an extension of the 15% rate into 2010. Retailers struggled to achieve the necessary systems changes at a particularly busy time last year and they did not want a repeat of the administrative burden during the Christmas and New Year sales period. Equally, some retailers believe that maintaining the 15% rate would have encouraged more people to part with their money in the January sales. It remains to be seen what the effect of the increase will be on retail sales figures.