VAT – back to 17.5%

3 months sees the end of the VAT reduction introduced by Alistair Darling in December 2008. VAT dropped by 2.5% and government reports state that the average household will benefit to the tune of over £400 per year! While a large amount of businesses were against the temporary change there are now a number of them who would admit that it has helped them keep their prices down and remain competitive providing stronger results than analysts predicted, particularly in Retail sector.

So when does it revert back to 17.5%? New years day believe or not, one of the busiest days for a large number of businesses, restaurants, pubs, shops to name but a few, and there have been a large number of requests for the government to delay the date allowing businesses enough time to adapt and make the necessary administrative changes. Unfortunately the government have said a resounding no as it would cost the country millions of pounds if only delayed for one day and they are not prepared to waste that money, well I guess that makes a change!

So I guess the best we can hope for is that HMRC adopt a flexible approach throughout that time frame. We shall see!