Forum Topic

Possible Cut in VAT?

There’s speculation the Chancellor will cut or even abolish VAT to encourage people to spend and boost the economy.  But until there is a firm announcement on this, who is going to buy anything now if they think it’s going to be cheaper in a few month’s time?  

Martine Guy ● 2116d4 Comments

I happen to like sitting on my money, I have worked for it for years and would like my interest back. The food we happen to have been buying in the lock down was like it was going out of fashion. I actually can not believe how much has been spent on food.

Barbara Stevens ● 2116d

It's been done before, after the 2008 banking crash. As you say, it needs to be done quickly so people don't just sit on their money waiting for it. Then you also get the benefit of raising it again later which will cause people to bring spending forward.

Frances Clarke ● 2116d

Who is going to buy anything, other than food, if they think the price will be cheaper in a few months time?  This speculation will not help businesses.
The Chancellor needs to make a firm announcement on this as soon as possible.  Is there a budget early July?  He needs to make a decision by then.

Martine Guy ● 2116d

It's an interesting idea - I suppose it could work against on-line retailers such as Amazon who use the low tax rates of places like Luxembourg to reduce their prices. Not thought as out it in detail - moist VAST revenue would need to be recouped elsewhere, and Amazon should probably still be cheaper because of their buying power and more efficient systems?  

Michael Ixer ● 2116d