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High street fears VAT could rise to 20%
Prospect of sales tax increase could stamp out green shoots of recovery, say retailers
VAT Takes Flight
Sir Stuart Rose, chief executive of Marks and Spencer, said he would not rule out VAT increase as the UK is 'skint'. Photograph: Stephen Hird/Reuters
Retailers are worried: just when it starts to look as though the worst might be over on the high streets, there are growing fears that an increase in VAT to 20% next year – and maybe even an extension of the tax to food, albeit at a lower rate – is heading their way.
Last week, Sir Stuart Rose, the chairman of Marks & Spencer, said he "would not rule [an increase] out" because the UK is "skint as a country". On the same day, Simon Wolfson, the chief executive of Next – who has been tipped as a possible future minister in a Cameron government – said he remained cautious about the outlook for next year because government expenditure was going to have to be cut, while public sector jobs would be lost and "all taxes will have to go up".
An increase in VAT to 20% would stoke inflation, but would also bring in big money for a government facing a deficit of £175bn this year – and it would be an annual boost rather than a one-off benefit.
http://www.guardian.co.uk/business/2...-retail-vat-20
Prospect of sales tax increase could stamp out green shoots of recovery, say retailers
VAT Takes Flight
Sir Stuart Rose, chief executive of Marks and Spencer, said he would not rule out VAT increase as the UK is 'skint'. Photograph: Stephen Hird/Reuters
Retailers are worried: just when it starts to look as though the worst might be over on the high streets, there are growing fears that an increase in VAT to 20% next year – and maybe even an extension of the tax to food, albeit at a lower rate – is heading their way.
Last week, Sir Stuart Rose, the chairman of Marks & Spencer, said he "would not rule [an increase] out" because the UK is "skint as a country". On the same day, Simon Wolfson, the chief executive of Next – who has been tipped as a possible future minister in a Cameron government – said he remained cautious about the outlook for next year because government expenditure was going to have to be cut, while public sector jobs would be lost and "all taxes will have to go up".
An increase in VAT to 20% would stoke inflation, but would also bring in big money for a government facing a deficit of £175bn this year – and it would be an annual boost rather than a one-off benefit.
http://www.guardian.co.uk/business/2...-retail-vat-20
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