VAT Back to 17.5% Tomorrow

It's the new year and the year long drop in VAT to 15% is over.  As of tomorrow, the despicable tax returns to full whack and I wonder just what help it has offered?

The Government cut VAT last December in an attempt to boost consumer spending during the economic downturn.  It was estimated that the strategy move deprived the Treasury of about £11 billion.

Shops have calculated that the change cost them £90 million to implement and say they will incur a similar charge to change it back.

So who benefited?  Not the customer, that's for sure.  Quite the most futile exercise of the year and indicative of this current Government.


The centre for economics and business research estimates that the VAT cut helped to improve consumer spending by nearly £7 billion.  It also argues that reverting to the original level could damage the economy if customers stop spending afterwards.