VAT Raise Prompting Misery for People across Great Britain
In a time where many continue to struggle to guarantee full or part time work whilst others are finding themselves all of a sudden unemployed, more of our wages being taken couldn’t have come at a worst point in time. The rise also seems to be 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 rise will cost everyday households around ?7.50 each week, the future appears to be fairly gloomy for buyers.
Exactly how much is the increase?
Even though the tax is rising by 2.5%, the cost to you won’t increase by 2.5%. This is because some of that cost is already Value Added Tax: the newest rate will only be charged on the amount before VAT is applied.
As an example, a teddy that might have set you back ?9.99 at 17.5% VAT would currently set you back ?10.
Typically, this means that an item that would have cost ?100 prior to the tax hike, will set you back ?102.13 today.
Will all products be affected by the VAT increase?
No, don’t panic! Not all goods will be affected. Essential purchases for example children’s clothes, food items and newspapers are left at 0% VAT and items including electricity and gas remain at 5% VAT.
The goods that will be charged at 20% VAT will be things for example , televisions, takeaways, bicycles and teddies. Unfortunately, for regular pub goers, you may find that your normal pint may be increased by as much as 6p!
So what does this VAT raise signify for me being a road or train user?
. Unfortunately for car owners, there has been a double whammy of rises. The shared effort of an increase in fuel duty and also the cost of crude oil means that the typical cost of a litre of unleaded fuel has been pushed to ?1.24, while diesel is costing typically ?1.28 per litre. In a few parts of the country the price of fuel is as high as ?1.45 a litre.
. If your choice of public transport is by train, chances are you may have already seen significant amounts of fare increases following the New Year. The average passenger may find that their train ticket has risen an average of around 6.2%. However, the government is suggesting to us that the raise may transfer more of the cost of train travel to passengers instead of taxpayers more generally. This isn’t good news if you are a passenger though!
What can I do?
Regrettably, it is quite challenging to avoid the VAT increase because it is something which is immediately added to all expenditures. However, be weary of several restaurants that include it on the end before you pay, with some restaurants showing the final cost with VAT in small print so you think that you are paying less than you are.
Although there are some things you can’t help purchasing, there are many items which are affected by the VAT raise that you buy that you may not essentially need. So if the additional pennies being included with your daily java total means that you decide that you don’t actually need it, you could possibly not just save on the VAT, you might find these small improvements to your spending habits could save you money in the future.
Because of the Value-Added Tax increases, some people may find themselves having difficulties after the christmas time celebrations.
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